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Full text of "Oversight hearing on supplemental security income : hearing before the Subcommittee on Human Resources of the Committee on Ways and Means, House of Representatives, One Hundred Third Congress,, first session, October 14, 1993"

OVERSIGHT HEARING ON SUPPLEMENTAL 
\\Y SECURITY INCOME 



Y 4. W 36: 103-45 

Oversight Hearinj o« Supplenental S... 

l HEARING 

BEFORE THE 

SUBCOMMITTEE ON HUMAN RESOURCES 

OF THE 

COMMITTEE ON WAYS AND MEANS 
HOUSE OP REPRESENTATIVES 

ONE HUNDRED THIRD CONGRESS 

FIRST SESSION 



OCTOBER 14, 1993 



Serial 103-45 



Printed for the use of the Committee on Ways and Means 
















U.S. GOVERNMENT PRINTING OFFICE 
76-194 CC WASHINGTON : 1994 



For sale by the U.S. Government Printing Office 
Superintendent of Documents, Congressional Sales Office, Washington, DC 20402 
ISBN 0-16-043970-1 



OVERSIGHT HEARING ON SUPPLEMENTAL 
SECURITY INCOME 



4. U 36: 103-45 



versight Hearing on Supplemental S. . . 

HEARING 

BEFORE THE 

SUBCOMMITTEE ON HUMAN RESOURCES 

OF THE 

COMMITTEE ON WAYS AND MEANS 
HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRD CONGRESS 

FIRST SESSION 



OCTOBER 14, 1993 



Serial 103-45 



Printed for the use of the Committee on Ways and Means 










U.S. GOVERNMENT PRINTING OFFICE 
76-194 CC WASHINGTON : 1994 



For sale by the U.S. Government Printing Office 
Superintendent of Documents, Congressional Sales Office, Washington, DC 20402 
ISBN 0-16-043970-1 



COMMITTEE ON WAYS AND MEANS 
DAN ROSTENKOWSKI, Illinois, Chairman 



SAM M. GIBBONS, Florida 
J J. PICKLE, Texas 
CHARLES B. RANGEL, New York 
FORTNEY PETE STARK, California 
ANDY JACOBS, JR., Indiana 
HAROLD E. FORD, Tennessee 
ROBERT T. MATSUI, California 
BARBARA B. KENNELLY, Connecticut 
WILLIAM J. COYNE, Pennsylvania 
MICHAEL A. ANDREWS, Texas 
SANDER M. LEVIN, Michigan 
BENJAMIN L. CARDIN, Maryland 
JEM MCDERMOTT, Washington 
GERALD D. KLECZKA, Wisconsin 
JOHN LEWIS, Georgia 
L.F. PAYNE, Virginia 
RICHARD E. NEAL, Massachusetts 
PETER HOAGLAND, Nebraska 
MICHAEL R. McNULTY, New York 
MIKE KOPETSKI, Oregon 
WILLIAM J. JEFFERSON, Louisiana 
BILL K. BREWSTER, Oklahoma 
MEL REYNOLDS, niinois 



BELL ARCHER, Texas 
PHILIP M. CRANE, niinois 
BILL THOMAS, California 
E. CLAY SHAW, Jr., Florida 
DON SUNDQUIST, Tennessee 
NANCY L. JOHNSON, Connecticut 
JIM RUNNING, Kentucky 
FRED GRANDY, Iowa 
AMO HOUGHTON, New York 
WALLY HERGER, California 
JEM McCRERY, Louisiana 
MEL HANCOCK, Missouri 
RICK SANTORUM, Pennsylvania 
DAVE CAMP, Michigan 



JANICE MAYS, Chief Counsel and Staff Director 
CHARLES M. Brain, Assistant Staff Director 
PHILLIP D. MOSELBY, Minority Chief of Staff 



Subcommittee on Human Resources 

HAROLD E. FORD, Tennessee, Chairman 



ROBERT T. MATSUI, California 
JIM MCDERMOTT, Washington 
SANDER M. LEVIN, Michigan 
MIKE KOPETSKI, Oregon 
MEL REYNOLDS, niinois 
BENJAMIN L. CARDIN, Maryland 



RICK SANTORUM, Pennsylvania 
E. CLAY SHAW, Jr., Florida 
FRED GRANDY, Iowa 
DAVE CAMP, Michigan 



(ID 



CONTENTS 



Page 

Press releases announcing the hearing 2 

WITNESSES 

Social Security Administration, Lawrence H. Thompson, Principal Deputy 

Commissioner 6 

Affeldt, David A., National Association for Hispanic Elderly 50 

American Council of the Blind, Paul W. Schroeder 103 

ARC, Elizabeth M. Boggs 118 

Blackwell, Stephanie, Center for Community Development of Prince George's 

County, Inc., and Citizens Advisory Committee — SSI Appeal to Conscience . 93 

Boggs, Elizabeth M., The ARC 118 

Case Managed Supported Employment, Julia Roher, as presented by Robert 

Maseroni 101 

Center for Community Development of Prince George's County, Inc., Steph- 
anie Blackwell 93 

Chicagoland SSI Coalition, Mark E. Peysakhovich 96 

Citizens Advisory Committee — SSI Appeal to Conscience: 

Stephanie Blackwell 93 

Robert Maseroni 101 

Community Legal Services, Inc., Richard P. Weishaupt 81 

Faleomavaega, Hon. Eni F. H., a Delegate to Congress from the Territory 

of American Samoa 42 

Flemming, Hon. Arthur S., SSI Modernization Panel 17 

Forethought Group, Frederick W. Rockwood 141 

Gilligan, Scott, National Funeral Directors Association 114 

Hardy, Dorcas R., Hardy & Associates 62 

Kleczka, Hon. Gerald D., a Representative in Congress from the State of 

Wisconsin 31 

Lacayo, Carmela G., National Association for Hispanic Elderly, as presented 

by David A. Affeldt 50 

Maseroni, Robert, Case Managed Supported Employment, and Citizens Advi- 
sory Committee — SSI Appeal to Conscience 101 

McElwain, Larry K., National Funeral Directors Association 114 

National Association for Hispanic Elderly, Carmela G. Lacayo, as presented 

by David A. Affeldt 50 

National Caucus and Center on Black Aged, Inc., Samuel J. Simmons 56 

National Funeral Directors Association, Larry K. McElwain and Scott 

Gilligan 114 

National Senior Citizens Law Center, Ethel Zelenske 71 

Peysakhovich, Mark E., Chicagoland SSI Coalition 96 

Ramstad, Hon. Jim, a Representative in Congress from the State of Min- 
nesota 38 

Rockwood, Frederick W., Forethought Group 141 

Roher, Julia, Case Managed Supported Employment, as presented by Robert 

Maseroni 101 

Schroeder, Paul W., American Council of the Blind 103 

Simmons, Samuel J., National Caucus and Center on Black Aged, Inc 56 

Slattery, Hon. Jim, a Representative in Congress from the State of Kansas .... 36 

SSI Modernization Panel, Hon. Arthur S. Flemming 17 

Weishaupt, Richard P., Community Legal Services, Inc 81 

(Hi) 



IV 

Page 

Zelenske, Ethel, National Senior Citizens Law Center 71 

SUBMISSIONS FOR THE RECORD 

Alliance for the Mentally 111 of New York State, Julie Renda, statement 152 

Alvarez, Daniel, Sr., Chicago Department of Human Services, statement 180 

American Association of Retired Persons, statement 157 

American Cemetery Association, Stephen L. Morgan, letter 163 

American Foundation for the Blind, Glenn M. Plunkett, statement 166 

Anderson, Eloise, California State Department of Social Services, statement ... 174 

Bates, Fred L., National Selected Morticians, letter 228 

Brookdale Center on Aging of Hunter College, Institute on Law and Rights 

of Older Adults, Andrew Koski, statement 170 

Bryant, David R., Chicago, Dl., letter 173 

Burgess, Robert, National Association of Disability Examiners, statement 226 

California State Department of Social Services, Eloise Anderson, statement .... 174 

Carp, Joel M., Jewish Federation of Metropolitan Chicago, statement 202 

Chicago Department of Human Services, Daniel Alvarez, Sr., statement 180 

Community Service Society of New York, Linda R. Wolf Jones, statement 182 

County Welfare Directors Association of California, Frank J. Mecca, state- 
ment 187 

Darcy, Michael, Gateway Foundation, Chicago, Dl., letter and attachment 198 

Dunlavey, Michael E., Dunlavey Ward & Pagliari, Erie, Pa., letter 191 

Dunn, Will T., Jr., South Carolina Trial Lawyers Association, letter 240 

Flack, Gary, Atlanta, Ga., statement 193 

Gateway Foundation, Chicago, 111., Michael Darcy, letter and attachment 198 

Hickey, Sydney Tally, Military Coalition, and National Military Family Asso- 
ciation, statement and attachment 218 

Jewish Federation of Metropolitan Chicago, Joel M. Carp, statement 202 

Jones, Linda R. Wolf, Community Service Society of New York, statement 182 

Judge David L. Bazelon Center for Mental Health Law, Washington, D.C., 

Rnoda Schulzinger and Joseph Manes, statement 205 

Kohl, Hon. Herb, a United States Senator from the State of Wisconsin, 

statement 212 

Koski, Andrew, Brookdale Center on Aging of Hunter College, Institute on 

Law and Rights of Older Adults, statement 170 

Manes, Joseph, Judge David L. Bazelon Center for Mental Health Law, 

Washington, D.C., statement 205 

Mecca, Frank J., County Welfare Directors Association of California, state- 
ment 187 

Meek, Hon. Carrie P., a Representative in Congress from the State of Florida, 

statement 215 

Military Coalition, Sydney Tally Hickey and Michael F. Ouellette, statement 

and attachment 218 

Morgan, Stephen L., American Cemetery Association, letter 163 

Murchison, David C, National Selected Morticians, letter 228 

National Alliance for the Mentally 111, statement 222 

National Association of Disability Examiners, Robert Burgess, statement 226 

National Military Family Association, Sydney Tally Hickey, statement and 

attachment 218 

National Selected Morticians, Fred L. Bates and David C. Murchison, letter ... 228 

New Jersey State Funeral Directors Association, Inc., statement 231 

Ouellette, Michael F., Military Coalition, and Non Commissioned Officers 

Association of the United States of America, statement and attachment 218 

Patrick, Douglas F., South Carolina Trial Lawyers Association, letter 240 

Patterson, Sarah B., San Francisco, Calif., letter 235 

Plunkett, Glenn M., American Foundation for the Blind, statement 166 

Renda, Julie, Alliance for the Mentally Dl of New York State, statement 152 

Schulzinger, Rhoda, Judge David L. Bazelon Center for Mental Health Law, 

Washington, D.C., statement 205 

Shelton, Stephanie, Forestville, Md., statement 238 

South Carolina Trial Lawyers Association, Will T. Dunn, Jr. and Douglas 

F. Patrick, letter 240 

Stark, Hon. Pete, a Representative in Congress from the State of California, 

statement and attachment 244 



OVERSIGHT HEARING ON SUPPLEMENTAL 
SECURITY INCOME 



THURSDAY, OCTOBER 14, 1993 

House of Representatives, 
Committee on Ways and Means, 
Subcommittee on Human Resources, 

Washington, D.C. 
The subcommittee met, pursuant to call, at 10 a.m., in room 
B-318, Rayburn House Office Building, Hon. Harold E. Ford (chair- 
man of the subcommittee) presiding. 

[The press releases announcing the hearing follow:] 



(1) 



FOR IMMEDIATE RELEASE PRESS RELEASE #7 

FRIDAY, JULY 2, 1»»> SUBCOMMITTEE OM HUNAN RESOURCES 

COMMITTEE OM WAYS AMD MEAMS 
U.S. BOOSE OF REPRESENTATIVES 
I 101 LOMOWORTH HOOSE OFFICE BLDO. 
WASKIMOTOM. D.C. 20S1S 
TELEPHOME: (202) 22S-1721 

THE HONORABLE HAROLD B. FORD (D. , TBMM. ) , CHAIRMAN, 
SUBCOMMITTEE OM HUMAN RESOURCES, COMMITTEE OM WAYS AMD MBAMS, 

U.S. BODSE OF REPRESENTATIVES, 
ANNOUNCES AM OVERSIGHT HEARING OM SUPPLEMENTAL SECURITY INCOME 

The Honorable Harold E. Ford (D. , Term.). Chairman, Subcommittee on 
Human Resources, Committee on Hays and Means, U.S. House Of 
Representatives, today announced that the Subcommittee will hold an 
oversight hearing on the Supplemental Security Income program. The date 
of the hearing will be announced in a subsequent press release. 

BACKGROUND 

The Supplemental Security Income (SSI) program is authorized by 
title XVI of the Social Security Act. Enacted as part of the 1972 
amendments to the Social Security Act (P.L. 92-603) and begun in 1974, 
SSI provides monthly cash payments in accordance with uniform, 
nationwide eligibility requirements to needy aged, blind, and disabled 
persons. The SSI program replaced the former Federal grants to the 
States for old-age assistance, aid to the blind, and aid to the 
permanently disabled. These Federal grants continue in Guam, Puerto 
Rico and the Virgin Islands; however, the Northern Mariana Islands is 
covered by SSI. 

SCOPE OF THE HEARING 

Members of the Subcommittee are interested in hearing testimony 
relating to: 

(1) Recommendations made by the SSI Modernization Panel - 

The SSI Modernization Panel was established to conduct the first 
comprehensive review of the SSI program since it began in 1974. The 
project was designed to "create a dialogue that provided a full 
examination of how well the SSI law, and the policies developed by SSA 
to implement the law, serve people with very low or no income who are 
over 6S or blind or otherwise disabled." The SSI Modernization Panel 
released a report in August 1992. 

(2) The effect of the Supreme Court's decision in Sullivan v. Zeblev - 

( Zebley ) 

In Zebley , the Supreme Court ruled that the Social Security 
Administration (SSA) was applying a standard of disability to children 
that was stricter than had been intended by Congress when it passed the 
legislation that established the SSI program. In response, SSA issued 
new regulations for evaluating childhood disability benefits, and the 
percentage of applications for children that are approved has increased. 
Recently, however, educators and others have criticized the SSI program 
for providing benefits to children whom they think are not disabled. 

(3) Eligibility requirements for immigrants and substance abusers - 

Recent news media reports about substance abusers and immigrants on 
SSI have been troubling. The problem of substance abusers receiving SSI 
benefits and not meeting treatment requirements has become an issue in 
some parts of the country. Critics have charged that SSI benefits might 
be enabling substance abusers to continue their addictions. Other news 
reports have portrayed immigrants paying middlemen to help them apply 
for SSI and, in some cases, defrauding the government by paying off 
doctors to diagnose them as mentally ill to qualify for SSI benefits. 

(4) Certain criteria for establishing trusts - 

Trusts may be set up for SSI recipients to shield income and assets 
from the SSI means tests. Although some might view this as an abuse of 
a welfare program, there are some instances where it might be justified. 

(MORE) 



For example, trusts are particularly helpful to parents of Zebley 
children, who can receive lump sum awards dating back to 1980. They are 
also helpful to SSI recipients who receive large awards for damages 
incurred in accidents. 

DETAILS FOR SUBMISSION OF REQUEST TO BE HEARD: 

Individuals and organizations interested in presenting oral 
testimony before the Subcommittee must submit their requests by 
telephone to Harriett Lawler, Diane Kirkland, or Karen Ponzurick 
[(202) 225-1721] no later than close of business Thursday, 
July IS, 1993, to be followed by a formal request to Janice Mays, Chief 
Counsel and Staff Director, Committee on Hays and Means, U.S. House of 
Representatives, 1102 Longworth House Office Building, Washington, D.C. 
20515. The Subcommittee staff will notify by telephone those scheduled 
to appear as soon as possible after the filing deadline. Any questions 
concerning a scheduled appearance should be directed to the Subcommittee 
staff [(202) 225-1025]. 

It is urged that persons and organizations having a common position 
make every effort to designate one spokesperson to represent them in 
order for the Subcommittee to hear as many points of view as possible. 
Time for oral presentations will be strictly limited with the 
understanding that a more detailed statement may be included in the 
printed record of the hearing. (See formatting requirements below.) 
This process will afford more time for Members to question witnesses. 
In addition, witnesses may be grouped as panelists with strict time 
limitations for each panelist. 

In order to assure the most productive use of the limited amount of 
time available to question witnesses, all witnesses scheduled to appear 
are required to submit 200 copies of their prepared statements to the 
Subcommittee office, B-317 Rayburn House Office Building, at least 48 
hours in advance of their scheduled appearance. Failure to comply with 
this requirement may result in the witness being denied the opportunity 
to testify in person. 

WRITTEN STATEMENTS IN LIEU OF PERSONAL APPEARANCE : 

Any persons to organizations wishing to submit a written statement 
for the printed record of the hearing should submit at least six (6) 
copies of their statements by close of business, two weeks after the day 
of the scheduled hearing, to Janice Mays, Chief Counsel and Staff 
Director, Committee on Ways and Means, U.S. House of Representatives, 
1102 Longworth House Office Building, Washington, D.C. 20515. If those 
filing written statements wish to have their statements distributed to 
the press and interested public, they may deliver 100 additional copies 
for this purpose to the Subcommittee office, room B-317 Rayburn House 
Office Building, on or before the day of the hearing. 

FORMATTING REQUIREMENTS : 

Each statement presented for printing to the Committee by a witness, any written statement or 
exhibit submitted for the printed record or any written comments in response to a request for written 
comments must conform to the guidelines listed below. Any statement or exhibit not in compliance with 
these guidelines will not be printed, but will be maintained in the Committee files for review and use by 
the Committee. 

1. All statements and any accompanying exhibits for printing must be typed in single space 
on legal-size paper and may not exceed a total of 10 pages. 

2. Copies of whole documents submitted as exhibit material will not be accepted for 
printing. Instead, exhibit material should be referenced and quoted or paraphrased. All 
exhibit material not meeting these specifications will be maintained in the Committee 
files for review and use by the Committee. 

3. Statements must contain the name and capacity in which the witness will appear or, for 
written comments, the name and capacity of the person submitting the statement, as 
well as any clients or persons, or any organization for whom the witness appears or for 
whom the statement is submitted. 

4. A supplemental sheet must accompany each statement listing the name, full address, a 
telephone number where the witness or the designated representative may be reached and 
a topical outline or summary of the comments and recommendations in the full 
statement. This supplemental sheet will not be included in the printed record. 

The above restrictions and limitations apply only to material being submitted for printing. 
Statements and exhibits or supplementary material submitted solely for distribution to the Members, the 
press and the public during the course of a public hearing may be submitted in other forms. 



FOR IMMEDIATE RELEASE PRESS RELEASE #9 

FRIDAY, OCTOBER 8, 1993 SUBCOMMITTEE ON HITMAN RESOURCES 

COMMITTEE ON WAYS AND MEANS 
0.8. HOUSE OF REPRESENTATIVES 
1102 LONGWORTH H0U8E OFFICE BLDO. 
WASHINGTON, D.C. 20515 
TELEPHONE: (202) 225-1025 



THE HONORABLE HAROLD E. FORD (D. , TENN.), CHAIRMAN, 

SUBCOMMITTEE ON HUMAN RESOURCES, COMMITTEE ON WAYS AND MEANS, 

U.S. HOUSE OF REPRESENTATIVES, ANNOUNCES A DATE FOR AN 

OVERSIGHT HEARING ON SUPPLEMENTAL SECURITY INCOME 



The Honorable Harold E. Ford (D. , Term.), Chairman, 
Subcommittee on Human Resources, Committee on Ways and Means, 
U.S. House of Representatives, today announced the date for the 
oversight hearing on the Supplemental Security Income program. 
(See Press Release #7, dated July 2, 1993.) The hearing will be 
held on Thursday, October 14, 1993, beginning at 10:00 a.m., in 
room B-318 Rayburn House Office Building. 

As indicated in Press Release #7, the final date for 
submitting requests to testify orally was Thursday, 
July IS, 1993. Persons submitting written statements for the 
record should submit at least six (6) copies by the close of 
business, Thursday, October 28, 1993, to Janice Mays, Chief 
Counsel and Staff Director, Committee on Ways and Means, U.S. 
House of Representatives, 1102 Longworth House Office Building, 
Washington, D.C. 20515. If those filing written statements for 
the record of the printed hearing wish to have their statements 
distributed to the press and the interested public, they may 
provide 100 additional copies for this purpose to the 
Subcommittee office, room B-317 Rayburn House Office Building, 
before the hearing begins. 



Chairman Ford. The Subcommittee on Human Resources of the 
Ways and Means Committee will come to order. 

Today, the subcommittee holds an oversight hearing on the sup- 
plemental security income program. This program has received at- 
tention lately regarding the provision that was being considered as 
a means of partially financing an extension of emergency unem- 
ployment compensation. I anticipate holding hearings in the future 
that will cover not only the treatment of immigrants and aliens, 
but also substance abusers in the SSI program. 

At 8 percent per year, the SSI program is one of the most rapidly 
growing Federal entitlement programs. Part of this growth is due 
to the impact of the 1990 decision of the Supreme Court in Sulli- 
van v. Zebley. This case made nearly a half million children poten- 
tially eligible for lump-sum retroactive benefits by ruling that the 
Social Security Administration must apply a standard of disability 
to children that is comparable to that applied to adults. But per- 
haps a more lasting force behind this trend is the underlying 
growth of the disabled population of all ages on Supplemental Se- 
curity Income. 

This hearing will address various issues, including the rec- 
ommendations of the SSI modernization project, the impact of the 
Zebley decision, and services to clients. Members of the moderniza- 
tion project were appointed by the Bush administration to conduct 
the first comprehensive review of the SSI program since it began 
in 1974. In August of 1992, a report was released documenting the 
findings of the project and recommendations by its panelists. 
Today, I look forward to the testimony of the distinguished chair- 
man of the SSI modernization project, Dr. Arthur Flemming. 

I am also pleased and encouraged by the response to the sub- 
committee's call for public witnesses on this subject. With more 
than 50 requests to testify, the subcommittee could not accommo- 
date all who wanted to present testimony. I encourage those not on 
the witness list, however, to submit their written testimony to this 
subcommittee. Meanwhile, I am going to ask witnesses today to 
summarize their testimony in 5 minutes. If we adhere to this rule, 
as being set by the chairman, all witnesses will have a fair oppor- 
tunity to be heard today. 

Let us begin with our first witnesses. I open this subcommittee, 
thinking that there might be a vote on the House floor on the Jour- 
nal, but undoubtedly that is not the case. I think there are mem- 
bers who are not here yet, but we are going to proceed. We have 
members listed first on the agenda. Many of them are waiting to 
see whether or not we have a recorded vote. I would like to call 
to the witness stand at this time the witness from the Social Secu- 
rity Administration, Hon. Lawrence H. Thompson, Principal Dep- 
uty Commissioner, along with Hon. Arthur S. Flemming, chair of 
the SSI Modernization Panel, former Secretary of Health, Edu- 
cation and Welfare. 

Dorcas Hardy is a witness who is testifying later today. We have 
not received copies of testimony you will be giving today. We would 
like to have that because the press release indicates that the copies 
of your written testimony must be received in advance. 



And also Stephanie Shelton, who will be testifying, we have not 
received your testimony. We would like to have it, also, so we can 
make it available to the public. 

As chairman of the subcommittee, I am very pleased, Dr. Thomp- 
son, to have you and Dr. Flemming testify before the subcommit- 
tee. I am one who has worked very closely with the SSA imple- 
menting policy changes in the SSI program. I am delighted, and I 
know I speak for both sides of the aisle, to have such distinguished 
witnesses who are going to be testifying today, and at this time, 
the Chair will recognize Dr. Thompson, first. 

STATEMENT OF LAWRENCE H. THOMPSON, PRINCIPAL 
DEPUTY COMMISSIONER, SOCIAL SECURITY ADMINISTRATION 

Mr. Thompson. Thank you, Mr. Chairman. SSI is one of the 
most valuable lifelines our Nation offers to its citizens who have 
the greatest need. Millions of people have been able to achieve a 
greater degree of comfort and security and have been able to lead 
their lives with dignity because of SSI. I appreciate the opportunity 
to bring you up to date on several of the issues concerning SSA's 
administration of this vitally important program. 

This morning, I want to discuss briefly four issues: SSI mod- 
ernization, Ze6/ey-related childhood disability, trusts, and pay- 
ments to aliens and substance abusers. And in order to be brief, 
I would like to submit my full written testimony for the record. 

Chairman Ford. It will be made a part of the record, sir. All tes- 
timony should be summarized within the 5-minute limit. The writ- 
ten testimony will, in fact, be made a part of the record today. 

You may proceed. 

Mr. Thompson. Thank you, Mr. Chairman. 

Chairman Ford. Thank you. 

Mr. Thompson. Let me begin by bringing you up to date on the 
SSI modernization project, and I want to start by praising the work 
of Arthur Flemming, who is here sitting beside me, a man whose 
passion for public service has been demonstrated yet again in his 
work on behalf of SSI modernization. He and 20 other experts in 
the program and related public policy areas held public meetings 
throughout the country to gather comments on an SSI program 
that had been in operation for 18 years without a comprehensive 
outside review. 

Their final report identified over 50 options for changes that 
were supported by a majority of the experts. Of that list, the ex- 
perts designated four options they believe deserving of priority at- 
tention for congressional action. Those 4 options are: one, increas- 
ing the benefit amount incrementally over 5 years to 120 percent 
of poverty; second, increasing resource limits; third, eliminating 
consideration of food, clothing, and shelter as income; and fourth, 
increasing SSA staffing, including State disability determination 
service agencies, by 6,000 employees. 

Each of these options would require authorizing legislation or the 
appropriation of additional funds; and the cost of all four could be 
over $80 billion for the first 5 years. 

We are evaluating the final report and the public comments and 
are using them in our ongoing efforts to improve the SSI program. 



On the issue of childhood disability, as you said, in 1990 the Su- 
preme Court decided Sullivan v. Zebley. The decision required SSA 
to dramatically revise the rules used to decide whether children are 
disabled and eligible for SSI benefits. 

In the interests of time, I won't review in detail the process used 
by SSA to comply with the Supreme Court decision, although the 
decision is discussed in my written testimony. I would just say that 
the new rules, which were developed in consultation with many ex- 
perts and advocates in numerous fields relating to childhood dis- 
ability, are both state of the art and based on standard pediatric 
practices for evaluating children. 

After publishing the rules in early 1991, SSA notified over 
452,000 children who were denied benefits, or had their benefits 
terminated, since January 1, 1983, that they could come in for a 
reconsideration. 

Public comments on the rules published in February 1991 were 
almost unanimously favorable. However, they are still relatively 
new, and it would not be unreasonable to expect that we will want 
to refine them or change them as we gain experience and insight 
through adjudications, public feedback, and ongoing monitoring 
and study. 

We are continuing to gather information about the program, 
looking at the kinds of changes that have occurred and tracking 
cases to understand the effects of the new rules. We are carefully 
monitoring the quality of our adjudications and are providing train- 
ing and written instructions as necessary. We are now also doing 
a study looking at children with learning disabilities and behav- 
ioral disorders. Our ongoing reviews, together with a recently initi- 
ated audit by the HHS Office of Inspector General to evaluate the 
program's vulnerability to abuse, should help us to pinpoint any 
problem areas and to take appropriate action. 

Let me speak briefly about trusts. Under current rules, if an in- 
dividual is the beneficiary of a trust, but his access to the trust 
principal is restricted, that trust is not his resource. 

In the mid-1980s, business and law journals and financial advis- 
ers began publishing articles recommending trusts as ways for par- 
ents to shelter assets for their disabled children and for elderly 
people to shelter their own assets and qualify for means-tested 
public assistance such as SSI and Medicaid. 

Sheltering assets in this way raises fundamental questions and 
concerns. It has always been the generally accepted view that since 
SSI is a program of last resort, people should use resources in ex- 
cess of the SSI resource limits to provide for their own support be- 
fore the Federal Government begins providing support. 

Mr. Chairman, we believe it is time to review how all trusts are 
treated in all income-maintenance programs, and we will be happy 
to work with your committee on this topic. 

Finally, Mr. Chairman, let me say a word about the payment of 
benefits to drug abusers and alcoholics, and about the payment of 
benefits to aliens. 

As you know, those who receive benefits based on a drug- or alco- 
hol-related disability are required to undergo treatment when it is 
appropriate and available as a condition of receiving benefits. We 
ensure compliance with this requirement through agreements with 



8 

States and private contractors serving as our referral and monitor- 
ing agencies. In die past, we have been unsuccessful in securing 
agreements to cover all geographical locations in a uniform man- 
ner. 

I am pleased to report considerable progress in this area. Work- 
ing with the Substance Abuse and Mental Health Services Admin- 
istration of the Public Health Service, we have developed a na- 
tional model agreement to use in entering into referral and mon- 
itoring contracts with all 50 States and the District of Columbia, 
and we expect virtually all of these contracts will be in place by 
this December. We have increased the funding for this activity 
from $4 million in fiscal year 1993 to $20 million in this fiscal year. 

We will also be starting demonstration projects to identify and 
test ways in which we can provide better treatment options to this 
population. 

As to aliens, the law states that aged, blind or disabled residents 
of the United States who are not U.S. citizens may be eligible for 
SSI if they are either lawfully admitted for permanent residence or 
permanently residing in the United States under color of law. 

For the most part, aliens in lawful residence status have spon- 
sors who signed affidavits of support. In determining eligibility and 
benefit amount, a portion of his sponsor's, and sponsor s spouse's, 
income and resources are deemed to be available to the alien for 
3 years after the alien's admission to the United States for perma- 
nent residence. 

This has the effect of preventing SSI eligibility for most lawfully 
admitted aliens during their first 3 years in the country. Aliens 
permanently residing under color of law generally do not have 
sponsors and thus are not subject to the aforementioned deeming 
requirements. Therefore, they may become eligible for SSI after 
being in this country for 30 days without regard to anybody else's 
income or resources. 

Mr. Chairman, I have had an opportunity to touch only briefly 
on the provisions that you asked us about, and I would be happy 
to answer any questions that vou or the other members of the com- 
mittee may have. And we, of course, would be happy to continue 
working with you to improve this program and deal with any of the 
issues that come up today. 

Chairman Ford. Thank you very much, Dr. Thompson, for your 
testimony. 

[The prepared statement follows:] 



TESTIMONY BY LAWRENCE H. THOMPSON, PRINCIPAL DEPUTY COMMISSIONER 
SOCIAL SECURITY ADMINISTRATION 

Mr. Chairman and Members of the Subcommittee: 

I am very pleased to be here today to talk about the 
Supplemental Security Income (SSI) program. As you requested, I 
will specifically address the SSI Modernization Project, Zeblev 
matters, how trusts are treated under SSI, and SSI payments to 
aliens and substance abusers. Before I do so, however, let me 
begin with a brief overview of the SSI program in order to 
provide a frame of reference for the discussion of the subjects 
of today's hearing. 

I want to say at the outset that I believe that the SSI program 
is a successful and effective program which has helped millions 
of people lead their lives with dignity. In fact, it has 
provided, and continues to provide, a very important element of 
the Nation's support system for aged, blind, and disabled people. 
SSI is a program of last resort. The fundamental goal is to 
provide a basic level of income support to the needy aged, blind, 
and disabled persons based on nationally uniform eligibility 
standards and payment levels, thus supplementing other income 
that an individual receives. 

Let me now give you some numbers that show the scope of the 
SSI program. As of August 1993, the last month for which we have 
numbers, there were 5.9 million people receiving federally 
administered SSI and/or State supplementary payments. This 
figure represents an increase of almost 29 percent over the 
number of people receiving benefits 5 years ago and a 
15.4 percent increase over December 1991 numbers. While the 
number of aged and blind recipients has not changed significantly 
since December 1991, the number of disabled persons has increased 
by almost 20 percent. 

As the number of people receiving SSI climbs, so too do 
Federal outlays. Projected outlays for Federal benefits in 
fiscal year 1993 are almost $22 billion. This represents 
approximately a 90 percent increase over similar outlays in 1989. 

SSI MODERNIZATION PROJECT 

Mr. Chairman, let me now turn to the first of the specific 
Issues you asked me to address today — the SSI Modernization 
Project. 

Because the SSI program had been in operation for 18 years 
without a comprehensive outside review, in 1990 SSA enlisted the 
help of 21 experts in the SSI program and related public policy 
areas to undertake such a review. This project was chaired by 
the distinguished former Secretary of Health, Education, and 
Welfare, Dr. Arthur Flemmlng. The experts came from academia, 



10 



State and local governments, and private, nonprofit 
organizations . 

The first phase of the project created a dialogue that would 
provide a. full examination of how well the SSI program serves 
people with very low or no income and who are over 65, blind, or 
disabled. The experts held 11 public meetings around the country 
which brought to light a number of Issues and options for 
potential Improvements in the SSI program. A full discussion of 
the major issues and options was published in the Federal 
Register in July 1991. Over 14,000 public comments were 
received. 

After considering the public comments, the experts 
determined their individual points of view concerning what 
options they supported and which deserved priority consideration. 
Their conclusions are contained in their final report, which was 
published in the Federal Reals ter on September 4, 1992. In 
response to a request for public comments, SSA heard from over 
10,000 persons and organizations. He received comments from 
people in every State and the District of Columbia. 

Options for Changes in the SSI Program 

The final report identified over 50 options for changes 
supported by a majority of the experts. These addressed concerns 
about a wide range of areas — benefit levels, income and resources 
limits, the definition of "aged," the disability process and work 
incentives, how SSI is linked to the Medicaid and Food Stamp 
programs, and the adequacy of SSA staffing levels. 

A majority of the experts identified four options that they 
thought deserved priority attention for Congressional action. 
Generally, they thought that these options would work toward the 
goals of improving the overall economic condition of SSI 
recipients, simplifying the program, enhancing recipients' 
dignity, and improving service to the public. 

The four options are: increasing the SSI benefit amount 
incrementally over 5 years to 120 percent of the poverty level; 
increasing the resource limits to $7,000 for an individual and 
$10,500 for a couple (from $2,000 and $3,000, respectively), 
while reducing the number of resource exclusions; eliminating the 
consideration of food, clothing, and shelter as income; and 
initially increasing SSA staffing, including State Disability 
Determination Service agencies, by 6,000 employees. None of 
these options can be implemented without legislation authorizing 
the change or appropriating additional funds. However, the cost 
of all four options would be well over $80 billion over the first 
5 years, which argues for caution. 



11 



We are evaluating the final report and the public comments. 
We will be using them in our ongoing efforts to identify changes 
that will Improve the SSI program in the context of the 
Administration's current budget goals, and other initiatives. 

CHILDHOOD DISABILITY 

Mr. Chairman, I would now like to turn to the subject of 
childhood disability. You asked me to address the effect of the 
Supreme Court's 1990 decision in Sullivan v. Zeblev . This 
important, wide-ranging decision required us to dramatically 
revise our rules for deciding whether children are disabled for 
establishing SSI eligibility. 

Disability Rules Pre- and Post-Zeblev 

As you know, Mr. Chairman, title XVI of the Act provides 
only a brief definition of disability for children. In a 
parenthetical statement at the end of the general definition of 
disability for adults, the statute provides that a child under 
age 18 is disabled if he or she has any medically determinable 
impairment that is "of comparable severity" to one that would 
disable an adult. Since the general definition of disability is 
based on an inability to work, and since children do not 
generally work, our regulations for childhood disability prior to 
the Zeblev decision were premised primarily on a medical 
standard. Specifically, our regulations required children to 
show that they had an Impairment (s) that met the requirements of 
one of the impairments in our Listing of Impairments or that were 
equal in severity to a listed impairment. 

For several reasons, the Supreme Court held that this 
listings-only rule did not implement the intent of Congress to 
provide a "comparable severity" standard for children. One of 
the main reasons was that our sequential evaluation process for 
adults contains a step at which adults whose impairments do not 
meet or equal one of our listings can show that they are disabled 
by alternative means, involving an evaluation of the functional 
effects of their impairments. Our prior regulations did not 
provide such an opportunity for children: A child whose 
impairments did not meet or equal the requirements of a listing 
was not disabled. 

As a result of the Supreme Court decision, we began to 
provide an individualized functional analysis for children, as we 
do for adults who cannot be determined disabled at the listings 
step. The Court agreed that a vocational analysis was not 
applicable to children, but said that an evaluation of a child in 
terms of "age-appropriate activities" would be comparable. 

SSA undertook a good-faith effort to implement both the 
letter and the spirit of the Supreme Court's decision and to 



12 



strive to provide rules that would be state-of-the-art. To help 
us accomplish this task, SSA sought advice from leading advocates 
for children with disabilities, as well as numerous individual 
experts in fields related to childhood medicine and disability, 
including physicians and psychologists with both clinical and 
academic credentials, researchers, and experts in social work, 
nursing, education, genetics, physical therapy, and other related 
areas . 

The new rules, which took all of this input into account, 
were, we believe, both state-of-the-art and based on standard 
pediatric practices for evaluating children. As required by the 
Supreme Court, they provided a means for establishing disability 
when a child's impairments do not meet or equal the criteria of a 
listing using an individualized assessment of a child's 
functioning. The new evaluation of childhood disability is based 
on a system of rating functional limitations in standard domains 
of functioning and behavior. 

Experience to Date 

After the new rules were published in early 1991, in 
accordance with the Zeblev court order, SSA notified over 452,000 
children who were denied SSI childhood benefits, or had their 
benefits terminated, since January 1, 1983. Over 70 percent of 
these (about 320,000) responded to the notice that SSA would 
readjudicate their claims under the new rules. About 126,000 of 
these class members have been found disabled. 

In addition to the class member claims, another 500,000 
children have been found disabled since the implementation of the 
new rules. Slightly over one-third of these children (187,000) 
were found disabled based on the new functional considerations 
that were put in place to comply with the Zeblev Supreme Court 
decision. 

The growth in new childhood entitlement is, in large part, a 
product of the increase in childhood SSI applications that the 
agency has processed over the last few years. For example, 
currently over 115,000 children are filing for benefits every 
calendar quarter, more claims than were received in all of 
calendar year 1989. 

There are numerous factors contributing to the increase in 
childhood filings. For example, the overall childhood population 
has increased, as has the proportion of children in poverty. In 
addition, the Zeblev court case, the new rules, and SSI outreach 
may have increased participation. 

As a result of the new functional assessment rules, the 
large class relief, and the growth in new childhood applications, 
the total number of children receiving SSI has increased from 



13 



almost 300,000 in December 1989 to over 729,000 in August 1993, 
an increase of 143 percent. 

The Future 

As you know, we published the new childhood disability 
regulations almost exactly a year after the Zeblev decision, with 
a request for public comments. In September, we published 
revised final regulations which are in most respects 
substantively unchanged. Public comments on the rules we 
published in February 1991 were almost unanimously favorable, 
expressing concern only about areas in which the rules might 
still result in denials of deserving children. However, our 
2 1/2 years' experience using the rules demonstrated that those 
fears were unfounded and did not show any major areas warranting 
revision. 

Nevertheless, the rules are still relatively new. It would 
certainly not be unreasonable to expect that we will want to 
refine or even change the childhood rules as we gain experience 
and insight through hands-on adjudications, feedback from the 
public, and ongoing monitoring and studies. He provided a 4-year 
sunset date to the regulations when we published them in 
September and we will review program experience during that time. 

In our stewardship role, we are gathering information about 
the program, looking at all kinds of changes that have occurred, 
and tracking cases to understand the effects of the new rules. 
Moreover, we have been carefully monitoring the quality of our 
adjudications since we first published the rules and we are 
providing training and written instructions as necessary. We are 
now also conducting a study targeting children with learning 
disabilities and behavioral disorders. Together with the Health 
and Human Services (HHS) Office of the Inspector General (OIG) 
audit and our ongoing reviews, we hope to be able to pinpoint any 
problem areas and to take appropriate action. 

In addition, Mr. Chairman, the HHS OIG has initiated an 
audit to determine if the new eligibility rules for SSI mentally 
disabled children increase the vulnerability of the program to 
abuse and to evaluate whether there are sufficient controls to 
ensure that SSI payments are benefiting eligible disabled 
children. We understand that the preliminary results of OIG's 
audit are expected to be released early next year. 

TREATMENT OF TRUSTS UNDER SSI RULES 

Mr. Chairman, I would now like to turn to the third issue 
you asked me to discuss, which is the way trusts are treated 
under the SSI program. 



14 



There is no mention of trusts in SSI law. The way trusts 
are treated under the SSI program is determined by SSA's 
regulatory definition of a resource, and changes in the current 
treatment of trusts may require legislation. 

We have defined resources as cash, other liquid assets, or 
any real or personal property that an individual owns and could 
convert to cash to be used for his support and maintenance. 
Regulations further provide that a person must have the right, 
authority, or power to liquidate property or his share of it in 
order for the property to be considered as his resource. 

Based on these regulatory provisions, our policy is that, if 
an individual is the beneficiary of a trust but his access to the 
trust principal is restricted, the trust is not his resource. 
In the usual case, a trustee and not the beneficiary is the one 
who has the title to the trust principal and has access to and 
power over the trust. Consequently, the trust is not the 
beneficiary's resource. 

Uses of Trusts 

Often trusts are created using funds from inheritances or 
court judgments or from an individual's own funds. Also, parents 
of handicapped children set up trusts to assure that, after their 
deaths, their children will not be deprived of the level of care 
provided by the parents, any education or training, and other 
special needs, while also continuing to receive SSI and Medicaid 
benefits. The trust arrangements often direct trustees not to 
use any of the funds in ways that would cause the loss or 
reduction of public assistance. 

In the mid-1980 's, business and law journals and financial 
advisors began publishing articles recommending trusts as ways 
for parents to shelter assets for their disabled children and for 
elderly people to shelter their own assets and qualify for 
means-tested public assistance benefits such as SSI and Medicaid. 
There has been increasing activity among parents and advocates 
for the handicapped to create trust instruments specifically to 
provide funds only to supplement public benefits. 

A provision of the Omnibus Budget Reconciliation Act of 1990 
requires that we notify persons who were determined to be 
eligible for retroactive SSI benefits under the Zeblev court 
ruling of the possibility of establishing trusts that would not 
be considered as resources and of the availability of outside 
legal assistance in establishing such trusts. 

The sheltering of assets in trusts that prohibit their use 
in ways that might affect SSI eligibility raises a fundamental 
question concerning the appropriateness of this effect on public 
assistance programs. In that SSI is a program of last resort, it 



15 



was the generally accepted view that it was reasonable to expect 
people to use resources that were in excess of the SSI resource 
limits for their support before the Federal Government should 
provide support. We believe it is time to review how trusts are 
treated in all Income maintenance programs and we will be happy 
to work with you on this. 

DRUG ADDICTS AND ALCOHOLICS 

Now let me turn to the next issue you asked me to address -- 
payment of SSI benefits to people who are substance abusers. As 
you know, those who receive SSI benefits based on a drug- or 
alcohol-related disability are required to undergo treatment when 
it is appropriate and available as a condition of receiving 
benefits. SSA ensures compliance with this requirement through 
agreements with States and private contractors serving as our 
referral and monitoring agencies. In the past, we have been 
unsuccessful in securing agreements to cover all geographical 
locations in a uniform manner. 

I am pleased to report that we are now moving to improve our 
services to these beneficiaries. For example, we have been 
working with the Substance Abuse and Mental Health Services 
Administration (SAMHSA) in the Public Health Service for more 
than a year and have developed a national, model agreement to use 
in entering into contracts expanding the referral and monitoring 
activity to all 50 States and the District of Columbia. We 
expect to have virtually all 51 contracts in place by December 
1993 and have increased the funding for referral and monitoring 
from $4 million in FY 1993 to $20 million in FY 1994. 

In addition, SSA and SAMHSA have entered into joint 
demonstration projects with two States (Washington and Michigan) 
to identify and test ways in which we can provide better 
treatment options to this population. 

SSI PAYMENTS TO ALIENS 

Before closing, Mr. Chairman, let me also briefly discuss 
one other topic raised by your letter of invitation — SSI payments 
to aliens. 

Aged, blind, or disabled residents of the United States who 
are not U.S. citizens may be eligible for SSI if they are either 
lawfully admitted for permanent residence or permanently residing 
in the United States under color of law. People residing in the 
United States under color of law (PRUCOL) represent many 
immigration statuses — 16 specific statuses plus a general 
category. The latter consists of any aliens the Immigration and 
Naturalization Service (INS) knows of, permits their presence in 
the country, and does not contemplate enforcing their departure. 



16 



Most aliens lawfully admitted for permanent residence are 
immigrants — i.e., they are Issued immigrant visas by the 
Department of State before they enter the United States. Others 
may be granted permanent resident status by INS after they have 
been in the United States. Some aliens granted permanent 
residence are required by INS to have sponsors sign affidavits of 
support . 

For those aliens who have individual sponsors, SSI 
eligibility and benefit amount is determined by considering a 
portion of the sponsor's (and sponsor's spouse's) income and 
resources to be available to the alien for 3 years after his 
admission into the United States for permanent residence. This 
has the effect of preventing SSI eligibility for most lawfully 
admitted aliens during their first three years in the country. 
Aliens under color of law do not have sponsors and thus are not 
subject to the deeming requirements. Therefore, they may become 
eligible for SSI after being in the country for 30 days, without 
regard to anyone else's income or resources. 

In December 1992, there were 601,430 people on the SSI rolls 
who were aliens; slightly over three-quarters were lawfully 
admitted residents, and the rest were PRUCOL. 

CONCLUSION 

In conclusion, Mr. Chairman, I would like to commend the 
Subcommittee for holding this hearing today, because the SSI 
program is of paramount importance in the lives of millions of 
poor, disabled, and elderly Americans. Certainly, the 
Administration is committed to making sure that SSI serves these 
Americans in the best way possible. Our fundamental goals are to 
improve the economic condition of recipients, enhance their 
dignity, simplify the program, and improve public service. I 
look forward to working with you and the other members of 
Congress to accomplish this task. 



17 

Chairman Ford. Dr. Flemming, we will hear from you now. 

STATEMENT OF HON. ARTHUR S. FLEMMING, CHAIR, SSI 
MODERNIZATION PANEL, AND FORMER SECRETARY OF 
U.S. DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE 

Mr. Flemming. Thank you very much, Mr. Chairman and mem- 
bers of the committee. I appreciate the opportunity to discuss the 
Supplemental Security Income Modernization project with you. 

This Nation believes in the dignity and worth of each individual. 
The national community, in accordance with this belief, has pooled 
some of its resources, beginning in the 1930s, both public and pri- 
vate, so that when individuals confront the hazards and vicissi- 
tudes of life, they can use these resources in order to help solve 
their problems and move forward. 

It aid so, almost 60 years ago, when it passed the overall Social 
Security program, during the deepest depression this Nation has 
ever experienced, and included in that program Aid to the Aged, 
Blind and Disabled, which has been a part of the social program 
from the beginning. It first started as a Federal-State program, and 
then in 1972, the Congress passed the Supplemental Security In- 
come program. 

As has been indicated, 20 persons from various walks of life were 
requested by Gwendolyn King, then Social Security Commissioner, 
to take a look at SSI and determine whether it was achieving the 
goals set by the Congress. 

I was asked to serve as chairman. The group took about 2 years 
to conduct its work. We held public meetings and hearings, and I 
visited all 10 regional offices of the Social Security Administration, 
local offices in each region and met particularly with the persons 
that pass on SSI claims. 

I would like to take — as a result of the opportunity that I had 
of meeting the persons that pass on SSI claims, I developed the 
conviction that we place too much reliance on rules and regulations 
and not sufficient reliance on the common sense of the person who 
function as a claims examiner. 

For example, it was these claims examiners that called our atten- 
tion to some of the very basic issues on which we have made rec- 
ommendations. They called our attention to the fact that, in their 
judgment, the provision that says that if a person moves their 
household to the household of their family or household of a friend 
that their benefits should be reduced by one-third made no sense 
and we unanimously recommended that that provision be repealed. 

Then, I am attaching to this testimony the names of the entire 
working group. We were ably assisted by Peter Spencer, who was 
then Director of our staff, and by Rhoda Davis, the Assistant Direc- 
tor of the Social Security Administration for the SSI program, and 
her entire staff. 

Our report, as has been indicated by Larry Thompson, contains 
over 50 options, some obviously more important than others; and 
in view of the short time available this morning, I am going to— 
I have already mentioned one of them. 

I would like to mention also your recommendation on resource 
requirements. It made no sense for a person who has slightly over 
$2,000 in resources — slightly over $3,000 as a couple are not — are 



18 

still needy persons. We took cognizance of the fact that the govern- 
ment is urging the beneficiaries to develop sums of money that 
they can use in emergencies, and then proceeds to tell them to re- 
duce that to 2,000 or 3,000. 

We were impressed with the fact that this is a seriously 
understaffed program. The backlog of disability cases, for example, 
is indefensible. It means that persons who are qualified for SSI 
must wait 3 to 4 months and, on appeal, up to 1 year before they 
are told they are qualified. 

While they are waiting for the help the national community has 
promised many of them, some are facing premature death or un- 
necessary suffering. Others are being denied the help that would 
enable them to use their abilities and to contribute to life. That is 
why we have recommended that SSA be authorized to employ 6,000 
additional personnel. 

I have noted that the pending bill appropriation bill for 1994 pro- 
vides for about 2,400 additional— 2,400 additional people which can 
be applied on the 6,000. I have also noted that the State groups 
that are working on additional requests for eligibility have been 

Erovided with about $200 million extra, so there is progress on 
oth of the those fronts. I am glad to note that. 

We urge you to consider the possibility of raising the SSI bene- 
ficiaries at least up to the poverty line. Is it right to insist that 5.4 
million persons live below the poverty line? Is it right to insist that 
the poorest of the poor continue to juggle a very small income be- 
tween paying the rent, paying for food, paying for clothing and pav- 
ing for drugs that a doctor has said are essential to tneir well- 
being? 

We also urge you to consider strengthening the work incentives 
that are built into this program. We feel it is imperative to provide 
incentives to the persons on the SSI roll to contribute to life by pre- 
paring for and going to work. Only by doing this can we persuade 
hundreds of thousands of persons that we believe in their dignity 
and worth. Only by doing this can we tap one of our most impor- 
tant resources for helping our Nation to move forward. 

The persons on our SSI rolls do not want to be pitied; they want 
the opportunity to be involved in life in a meaningful manner. We 
can reduce our SSI rolls to some extent and strengthen our Nation 
by providing these work incentives. 

I know that you recognize the seriousness of this situation. I will 
be glad to consider with you the facts we were called upon to face. 
In fact, I look forward to doing that in the future. I would be glad 
to discuss with you the pros and cons of the options that many of 
us decided to advocate. 

The future of many of our fellow Americans calls for prompt ac- 
tion. Failure to correct glaring weaknesses in SSI and similar pro- 
grams results in lack of confidence in our national community and 
sows the seeds that may sprout into riots. Correcting these weak- 
nesses makes available to us unexpected resources and helps us to 
strengthen our national community. 



19 



The motto of the former Department of Health, Education and 
Welfare when I was Secretary was "Hope, the Anchor of Life " I 
hope that we can replace despair with hope in the lives of the ap- 
proximately 8 million persons who are either on the SSI rolls or are 
qualified to be on those rolls. 

Thank you very much. 

Chairman Ford. Thank you very much, Dr. Flemmine 

[The prepared statement follows:] 



20 



TESTIMONY OF ARTHUR S. FLEMMING 
FORMER SECRETARY OF HEALTH, EDUCATION AND WELFARE 

I. Introduction 

A. I appreciate the opportunity of discussing the Supplemental Security 
Income Modernization Project with you. 

B. This nation believes in the dignity and worth of each individual. 

C. The national community, in accordance with this belief, has pooled 
some of its resources, beginning in the 1930s, both public and 
private, so that when individuals confront the hazards and 
vicissitudes of life they can use these resources in order to help 
solve their problems and move forward. 

D. It did so, almost sixty years ago, when it passed the over-all 
Social Security program, during the deepest depression this nation 
has ever experienced, and included in that program Aid to the Aged, 
Blind, and Disabled when they confront economic conditions which 
they cannot surmount by themselves. 

1. We felt that with this assistance these persons, in 
spite of the problems they faced could make a genuine 
contribution to life. 

2. Today, this program is known as the Supplemental Security 
Income program and is about to celebrate its 20th 
anniversary. 

E. Twenty persons, from various walks of life were requested by 
Gwendolyn King, then Social Security Commissioner, to take a look 
at SSI and determine whether it was achieving the goals set by 
the Congress. 

1. I was asked to serve as Chairman. 

2. The group took about two years to conduct its work. 

3. We held public meetings and hearings, and I visited all ten 
regional offices of the Social Security Administration, local 
offices in each region and met particularly with the persons 
that pass on SSI claims. 



21 



4. I am attaching to this testimony the names of the entire 
working group. 

5. We were ably assisted by Peter Spencer, who was the director 
of our staff and by Rhoda Davis, the Assistant Director of 
the Social Security Administration for the SSI program and her 
entire staff. 

II. Body 

A. Our report contains over fifty options, some obviously more important 
than others. 

1. We look forward to discussing these options with members 
of this Committee. 

2. We recognize that you are the "conscience" of the House of 
Representatives on this program. 

3. Congresswoman Carrie Meek has introduced a bill containing 
some of our important options. 

B. In view of the short time available this morning I am going to make 
brief observations on three options. 

C. We were impressed with the fact that this is a seriously understaffed 
program. 

1. The backlog of disability cases, for example, is 
indefensible . 

2. It means that persons who are qualified for SSI must wait 
three to four months and, on appeal, up to a year before they 
are told they are qualified. 

3. While they are waiting for the help the national community has 
promised many of them, some are facing premature death or 
unnecessary suffering; others are being denied the help that 
would enable them to use their abilities and to contribute to life. 



22 



4. That is why we have recommended that SSA be authorized to 
employ 6,000 additional personnel. 

D. We urge you to consider the possibility of raising the benefits of 
SSI beneficiaries at least up to the poverty line. 

1. Is it right to insist that 5.4 million persons live below 
the poverty line? 

2. Is it right to insist that the poorest of the poor continue 
to juggle a very small income between paying the rent, paying 
for food, paying for clothing and paying for drugs that a 
doctor has said are essential to their well-being? 

E. We also urge you to consider strengthening the work incentives that 
are built into this program. 

1. We feel that it is imperative to provide incentives to 
persons on the SSI rolls to contribute to life by preparing 
for and going to work. 

2. Only by doing this can we persuade hundreds of thousands of 
persons that we believe in their dignity and worth. 

3. Only by doing this can we tap one of our most important 
resources for helping our nation to move forward. 

4. The persons on our SSI rolls do not want to be pitied; they 
want the opportunity to be involved in life in a meaningful 
manner . 

5. We can reduce our SSI rolls and strengthen our nation. 



23 



III. Conclusion 

A. I know that you recognize the seriousness of this situation. 

B. I will be glad to consider with you the facts we were called upon 
to face. 

C. I will be glad to discuss with you the pros and cons of the 
options that many of us decided to advocate. 

D. The future of many of our fellow Americans calls for prompt 
action. 

E. Failure to correct glaring weaknesses in SSI and similar programs 
results in lack of confidence in our national community and sows 
the seeds that may sprout into riots; correcting these 
weaknesses makes available to us unexpected resources and help 

to strengthen our national community. 

F. The motto of the former Department of Health, Education and 
Welfare was "Hope, the Anchor of Life" "Let us— together— endeavor 
to replace despair with hope in the lives of the approximately 
eight million persons who are either on the SSI rolls or are 
qualified to be on those rolls. 



24 



SSI MODERNIZATION PROJECT EXPERTS 



Elizabeth M. Boggs — the parent, guardian and representative 
payee (for Social Security) of an adult son with complex 
disabilities; she has been a volunteer advocate for people 
with developmental disabilities for more than forty years. 

M. Kenneth Bowler — currently Vice President, Federal 
Government Relations with Pfizer Inc. He was formerly Staff 
Director of the House Ways and Means Committee, and is an 
Adjunct Professor at the University of Maryland, Baltimore. 
He is married and has four children. 

A. Lorraine Brannen — District Manager, Social Security 
Administration (Retired) 

John Costa — Former Commissioner, U.S. Assistance Payments 
Administration 

Arthur S. Flemming — Former Secretary, Department of Health, 
Education and Welfare, has held many prominent posts 
including U. S. Commissioner on Aging and Chairman, 
U.S. Commission on Civil Rights. He currently chairs 
coalitions of national organizations serving as advocates in 
the areas of social security, health care, and civil rights. 

Robert E. Fulton — an independent public policy analyst. He 
works part-time for the Oklahoma Alliance for Public Policy 
Research and the National Center for Children in Poverty 
(Columbia University) . He formerly served for 35 years in 
executive-level positions in federal and State governments. 

Lou Glasse — M.S.W., President of the Older Women's League, is 

a consultant on policies and services for older people. She 

serves on the Board of Advisors of the Mildred and Claude 

Pepper Foundation and of the National Academy on Aging. 

t 

Sharon Gold — President, National Federation of the Blind, 

California 

Robert Gorski — Disability Advocate, City of Pasadena, 
California 

Arthur E. Hess — Former Acting Commissioner of Social Security 
and first SSA director of Disability Insurance and of 
Medicare. 

Chris Koyanagi — Vice President for Government Affairs, 
National Mental Health Association 



(ix) 



25 



Carmela G. Lacayo — National Association of Hispanic Elderly; 
President and CEO 

Richard P. Nathan— Provost , State University of New York and 
Director of its Rockefeller Institute of Government, Albany, 
New York 

Barbara L. Sackett — parent of an adult daughter with 
developmental disabilities, and a professional in the field 
of developmental disabilities; she has been a volunteer 
advocate for people with disabilities for more than thirty 
years . 

Samuel Sadin — Deputy Director, Brookdale Center on Aging of 
Hunter College, Institute on Law and Rights of Older Adults, 
New York 

Bert Seidman — was AFL-CIO Social Security Director from 1966 
until his retirement in 1990. Since then he has been a 
consultant to the National Council of Senior Citizens. He 
has twice served on the Advisory Council on Social Security 
and more recently on the Prospective Payment Assessment 
Commission which deals with the hospitalization (Part A) 
phase of Medicare. One of his three daughters who is 
autistic and severely retarded has been in a State mental 
hospital for 30 years. 

Timothy M. Smeeding— Profess*or of Economics and Public 
Administration, Maxwell School, Syracuse University 

Michael Stern — R. Duffy Wall and Associates; formerly 
Minority Staff Director, U.S. Senate Finance Committee 

Eileen P. Sweeney—Children's Defense Fund; formerly staff 
attorney, National Senior Citizens Law Center. 

Fernando M. Torres-Gil — Professor, University of California, 
Los Angeles 

Elaine T. White — retired management analyst, Office of Child 
Support Enforcement, Department of Health and Human Services, 
and a former SSA employee. 



(xi) 



26 

Chairman Ford. Dr. Flemming, the modernization panel that 
you served on and headed as chairman made several recommenda- 
tions to improve the SSI program. It is unfortunate, some of us 
would want to say, because of the severe budget restraints that we 
are all working under in this particular Congress, that it would be 
difficult to implement many of the recommendations. 

What areas do you believe should be given the most attention in 
light of the budget restraints we are working under in Congress? 

Mr. Flemming. I appreciate that question. 

First of all, I would urge this committee to recognize that we 
have an understaffed program, seriously understaffed program, and 
that is contributing very markedly to 

Chairman Ford. "Understaffed meaning the SSA? 

Mr. Flemming. Both SSA and SSI. 

Chairman Ford. I mean, the administration 

Mr. Flemming. Personally, the SSI at this point — my emphasis 
should be on SSI, but my comment applies to all of SSA and ap- 
plies to both title 2 and title 16 under the Disability Act; and we 
feel, particularly as a result of seeing situations in the field, 
that 

Chairman Ford. You didn't prioritize the areas that we should 
focus on. I have seen the list of recommendations that the mod- 
ernization panel really have been able to come out of the 

Mr. Flemming. That is one of them. The fact of the matter is, 
I think most of us would put that first because without adequate 
staff, SSA cannot serve effectively the people of this Nation. 

The second thing — the second recommendation that I would em- 
phasize, and that we emphasized, was an increase over a period 
of — over a period of 5 years in the benefits. After all, when the Sen- 
ate reported out this bill in 1972, they said they were providing for 
a program that would make it possible for the aged, the blind and 
disabled to live up at least to the poverty line. This country has 
never reached that goal. 

I mean, for 20 years, the beneficiaries have been living right 
under the poverty line, and we think that at least the Congress 
should move rather quickly to bring this group up to the poverty 
line. 

The third recommendation that we made, that I already empha- 
sized, is the recommendation relative to a living arrangement. It 
made no sense to us that this government would say to bene- 
ficiaries, the poorest of the poor, who have a chance to move in 
with the household of a family or household of a friend, "We are 
going to penalize you by reducing your benefits by one-third." 

We were unanimous on that, and some rather strong language 
was used in our report setting forth our convictions on that. 

Then also we, as I have indicated here, do feel that a great deal 
of emphasis should be placed on the question of resources. We 
think that is outdated; 2,000 to 3,000 makes no sense. A number 
of programs in the Federal Government are moving up to 10,000 
or 12,000. 

We recommended 7,500 and 10,000 because it just doesn't make 
sense to take these beneficiaries on the one hand, say build up a 
sum of money that you can use if you confront a flood or a tornado 
or a hurricane or something of tnat kind, and then turn around 



27 

and say, "Spend that down in order to qualify for SSI." Because 
clearly people who are above resources of 2,000 or 3,000 are still 
needy persons. But we feel that a good deal of the emphasis should 
be placed on that. 

Also, I would say that I think I share of the conviction of every- 
body when we place a great deal of emphasis on constantly improv- 
ing the work incentives that we can provide people who are on our 
rolls with the opportunity of seeing — testing out their presence in 
the labor force without losing certain benefits that they have under 
SSI at the present time. 

After all, every — a lot of these people are potentially members of 
the work force — full-time, part-time, volunteers and so on. And the 
government should certainly invest some money in making that 
possible. It seems to me that is all to the good, both for them and 
for the country as a whole. So we did place a great deal of empha- 
sis on those recommendations. 

I could pick out others. For example, Larry talked about drug ad- 
diction and alcohol addiction. The system that we have developed, 
the representative payee is very important on that. The Congress 
has passed a number of laws on it, and yet we found that Congress 
has never appropriated a red cent to carry out that provision. That 
doesn't make sense. 

I mean, it is — the claims people have got to make a decision on 
whether you are going to go out and get representative payees, 
whether they are going to deal with backlog or outreach and so on; 
and they are faced with impossible conflicts. If we are going to 
have a system of representative payees, let's codify it. We rec- 
ommend it and at the same time authorize appropriation for it, so 
we have got a real honest-to-goodness system so we can really tack- 
le this drug and alcohol addiction problem. 

Chairman Ford. Would you talk briefly about the continuing dis- 
ability reviews that maybe are not being done by the SSA? 

Mr. Flemming. Well, Larry is in a better position to talk about 
that, but we did go into that. 

Chairman Ford. Your panel did go into that? 

Mr. Flemming. Well, I would like to have the opportunity of 
working with the committee in some detail, because that is a com- 
plicated issue. We can err either way. We can err in making very 
strict reviews that are not consistent with the welfare of the people 
who are under SSI, and on the other hand, we can fail to make re- 
views at times. 

Chairman Ford. The question is, should this be a priority? That 
is what I am trying 

Mr. Flemming. Yes, I definitely think so. It is a fundamental 
question, and I think this committee should go into it in some de- 
tail. 

Chairman Ford. I have listed the SSA understaffed with SSI 
program, the living arrangements of SSI recipients, the resources, 
and the work incentives. I guess these are the four areas 
prioritized by you as chairman of the modernization panel? 

Mr. Flemming. We would be delighted to work with you on 
those. They are very basic issues. They are controversial, the solu- 
tions and so on; the objectives, I think people tend to agree on. 



28 

We did assemble a good deal of evidence on that. I would be glad 
to share it with you, and I would glad to engage in a discussion 
of what is the best way to deal with it. And, incidentally, you — in 
effect, that is where the money comes from. And I would like to be 
able to discuss that also; we nave got some ideas on that. As we 
know 

Chairman Ford. I certainly would appreciate it if you would sub- 
mit information to the subcommittee addressing that particular 
issue. 

Mr. Flemming. Of course, you have got the report. I would be 
very glad to supplement it and do anything you want, anything 
that would help you to come to grips. , 

I think it is a very basic issue. It is a basic and fundamental 
issue confronting the country. Our consideration of it is going to be 
altered considerably if we adopt a universal right of health care, 
which I am confident we will. 

Chairman Ford. I have great confidence myself. 

Mr. Flemming. But when that is adopted, that will have an ef- 
fect on SSI. We ought to consider what the relationship between 
SSI and that is, because I think we are about to adopt that; and 
I think it is a great thing — the President has presented with us a 
great report and, of course, the First Lady has presented members 
of the committees on the Hill here with tremendous testimony, it 
seems to me. I think we are at an historic moment. 

Chairman Ford. Thank you very much. My time has expired, but 
I do have one question for Dr. Thompson. 

Dr. Thompson, I mentioned in my opening statement outlays 
growing at 8 percent per year. I think you somewhat responded to 
that in your statement. Is the administration considering ways 
maybe to control the rate of growth on the SSI outlays, and if so, 
could you? 

Mr. Thompson. Mr. Chairman, we do not have any kind of a co- 
ordinated strategy, at least at this time, that we are developing to 
deal with this. I think that there are some areas that you men- 
tioned also in your opening statement, such as the aliens issue, and 
there are some areas where we would be willing to work with you 
and look at some of the areas of growth. But we don't have any 
plan, or we don't have any coordinated program right now. 

Chairman Ford. Do you see areas in the SSI program where sav- 
ings can be reapproved and redistributed among the SSI program? 

Mr. Thompson. I wouldn't want you to think that there aren't 
areas that are going to be just a little bit painful to deal with. We 
are dealing with people with very limited assets, and it is not com- 
fortable taking benefits away from any of them. So the best I could 
say is that there are areas we could take a look at with you and 
see whether there is some money that could be saved, that we 
would feel better about spending it someplace else. 

But I don't want you to think that we know of a pocket or a 
chunk of people who don't deserve benefits and that we would all 
feel happy about taking their benefits away. That is not the case. 

Chairman Ford. Mr. Santorum. 

Mr. Santorum. Thank you, Mr. Chairman. 

Dr. Flemming, I noticed in reviewing your modernization 
project's findings that you are calling for an increase in spending 



29 

over the next 5 years of $105 billion, and that you are talking 
about adding 3.5 million new recipients to the SSI program. Given 
what the chairman has just talked about and the growth of the SSI 
spending, given the problems we are having in dealing with a 
budget deficit, I would be interested in having you submit to the 
subcommittee and hear you talk about how we would finance this 
increase in spending. 

Mr. Flemming. First of all, I sometimes say, however, that at the 
end of 5 years, the SSI budget would be about $38 billion, whereas 
today it is around $20 billion; in other words, close to double. 

Now, the bulk of the cost of those recommendations is contained 
in the 5-year recommendation that we increase benefits to 120 per- 
cent, about $28 million. 

Mr. Santorum. When you say "increase benefits to 120 percent," 
what you are talking about is a poverty calculation which does not 
include noncash benefits, so all of these people on SSI are receiving 
Medicaid, receiving food stamps and other noncash benefits that do 
not count toward poverty calculations, correct? 

Mr. Flemming. I appreciate that Medicaid and food stamps and 
so on are very much involved in the SSI program. The only figure 
I was using was the 

Mr. Santorum. My question is, that truly reflects 



Mr. Flemming. There would be an increase there. 

Mr. Santorum. Does that truly reflect what poverty is versus 
what the average American out there working for a living thinks 
it is? 

Mr. Flemming. We could agree on figures, I am sure. 

Let me take your fundamental issue. Yes, I had some very defi- 
nite convictions along that line. The Congress has passed the eco- 
nomic plan proposed by the President which does provide a good 
deal of money for deficit reduction, but also provides some money 
for domestic programs, new programs or old programs. I am simply 
contending that SSI should receive its fair share of that additional 
money. What that would amount to I don't know. That is some- 
thing we can discuss back and forth. 

But there is a possible source of income there. 

Mr. Santorum. I am not sure I understand where you are saying 
the possible source of income is. 

Mr. Flemming. The possible source of income is, when you 
passed the economic plan of the President at the first of the year, 
you did provide some additional funding, additional revenue, a 
large part of which would be used for deficit reduction over a pe- 
riod of 5 years, but some of which can be used for proving existing 
programs or developing new — for example, you have just passed 
the National Service Corporation bill, which does provide for some 
additional funds; it doesn't provide as much as he had requested 
in the first place, but it does provide some. 

Now, my contention is that when you consider supplemental 
funds of that kind, you should not pass over the SSI. This is a fun- 
damental, basic program and 



Mr. Santorum. I guess my- 



Mr. Flemming [continuing]. We should have a fair share of it 
apply to that. 



76-494 0-94-2 



30 

We set some goals. You can use those goals for the purpose of 
appropriating additional money for SSI, only representing its fair 
share at this particular point. 

Mr. Santorum. I hearken back to my question, which is, aside 
from where you say that there is an existing amount of money out 
there that we can draw from, what you are suggesting is that there 
are other programs that were given new funds under the Budget 
Reconciliation Act from which we would take money to fund SSL 

What programs would you suggest we take the money from? 

Mr. Flemming. I am not suggesting — in 1994 — well, first of all, 
in the 1994 budget, you appropriated funds for 2,400 additional 
personnel for SSA. That is part of our recommendation. 

Mr. Santorum. And I 

Mr. Flemming. So you made that particular decision. 

Mr. Santorum. I support that 100 percent. 

Mr. Flemming. When it comes to the 1995 budget, you would 
have the opportunity for reviewing funds that have been appro- 
priated for new programs or for old programs and so on; and I sim- 
ply urge that — in the 1995 budget, that SSI receive its fair share 
of increase in funding. 

Mr. Santorum. Again, try to answer my question which is, 
where would we get the money from? There is a deficit that we 
have, that we will have in 1995 as well as 1994. The new money 
for SSI is either going to come from some other program or in- 
creased revenues or an increased deficit. Those are the three op- 
tions. 

Mr. Flemming. I know. That is designed to put this program into 
competition With other programs. 

Mr. Santorum. Sir, that is the reason we are here, because we 
have to set priorities for these programs. 

Mr. Flemming. We would be very glad to sit down with you and 
discuss in detail the 1995 budget and where there is some money 
that can be used on SSI. 

Mr. Santorum. If I can 

Mr. Flemming. I am not going — we should put additional money 
in AFDC, too. 

Mr. Santorum. I appreciate that your panel's work recommends 
increasing the staffing limit. There are a lot of other recommenda- 
tions as well, and I think they are well-founded and very helpful 
to the committee. My only suggestion would be, if the panel is 

foing to come before us and ask us to increase spending on benefits 
105 billion in an era where we are running $200-plus billion an- 
nual deficits, it should come with some suggestions as to where we 
are going to get this money and not just 

Mr. Flemming. I just told you one place where we can get the 
money. I faced that question very seriously as a member of the 
panel and chairman of the panel. And I have been convinced that 
under the present administration there is going to be additional 
money for domestic programs, new and old; and all I am saying is 
that SSI should receive its fair share of that money. 

It got some share of it in 1994, and I think it should get a fair 
share in 1995. 

Mr. Santorum. Mr. Thompson, just a couple of questions for you. 
It is my understanding that the subcommittee is going to be hold- 



31 

ing a couple of additional hearings on SSI. One of them is going 
to be on the drug problem, and I think it is going to be with the 
Social Security Subcommittee that we will hold that hearing. 

Is there anyone in particular on your staff that we can work with 
in trying to come up with some solutions to this seemingly ever- 
increasing problem of growing numbers of addicts on SSI? 

Mr. Thompson. Sure, we can identify somebody for you to con- 
tact. 

Mr. Santorum. If you would get that to our subcommittee, I 
would very much appreciate it. And the same thing with money for 
noncitizens. That is another very rapidly increasing area of SSI, as 
the Chairman mentioned; and we would also like to have someone 
designated from your office to work with us on that. 

Mr. Thompson. No problem. 

Mr. Santorum. Thank you very much. 

Chairman Ford. Thank you very much, Dr. Thompson and Dr. 
Flemming, for coming out this morning. We look forward to work- 
ing with you over the next few months and looking into this area 
of supplemental security income. 

I would like to call on some of the my colleagues, Gerald Kleczka 
from Wisconsin; Jim Slattery from Kansas; and Jim Ramstad of 
Minnesota. 

I would like to welcome our first witness, a member of the full 
Committee on Ways and Means. We are delighted to have you here 
this morning. 

Gerald, I am going to start with you as a member of the commit- 
tee first. We are ready to proceed, Gerald, you may go ahead. 

STATEMENT OF HON. GERALD D. KLECZKA, A REPRESENTA- 
TIVE IN CONGRESS FROM THE STATE OF WISCONSIN 

Mr. Kleczka. Thank you, Mr. Chairman. 

Mr. Chairman, I take this opportunity to speak to you regarding 
the supplemental security income program. I will summarize my 
testimony and ask that the full text be submitted for the record. 

Chairman Ford. We have already stated earlier that you can 
summarize your text and all written testimonys will be made part 
of the record today, from all witnesses. 

Mr. Kleczka. Thank you. 

Mr. Chairman, my State of Wisconsin has one of the largest SSI 
programs in the country, so it is with some experience and exper- 
tise and great interest that I come before you today. In general, I 
have some doubts on whether the SSI program for children is ap- 
propriate. And most of my testimony will focus on this area. 

In most States, including Wisconsin, child SSI recipients also 
qualify for Medicaid. The question isn't, should we provide for 
these children; the question is, is there a better way. In addition, 
we must ensure that proper safeguards are in place so that no one 
is freeloading off the system. 

I have four major concerns I would like to share with you about 
the current program. First, some families of recipients are abusing 
the program. There are records of children being "coached" on ac- 
tions that will help them maintain benefits or gain acceptance into 
the program. A particularly startling example is a child whose fa- 
ther is on Social Security Disability and SSI. There are records of 



32 

both sexual and physical abuse of the child. After the father 
learned of the Zebley decision, the child began showing up to school 
with gum in her hair, began acting up, anaher grades dropped. 

Once she was approved for SSI, the family received nearly 
$18,000 in retroactive benefits. They then purchased a car, new 
furniture and clothes and took a vacation to Florida. Since then, 
they have been evicted because they had not paid their rent in 6 
months. 

Additionally, counselors report that some parents are refusing to 
allow their children treatment, fearing that improvement will cost 
them their benefits. One blatant example involved parents of a 
child with an attention deficit disorder, and the parents said, "We 
don't want medication, that will screw up his SSI." 

Thus, a cycle of dependency is perpetuated. It only hurts the 
child recipients in the long run. In too many cases, benefits are not 
being used to meet a child's medical needs, but are instead being 
spent on frivolous items by the parents. Under the current guide- 
lines, the benefits that a child receives are not necessarily linked 
to improving the child's situation. 

Clearly, we cannot permit these abuses to continue. 

Second, there is no family limit for SSI. This means that some 
Wisconsin families with multiple members qualified for SSI can re- 
ceive over $40,000 per year in tax-free benefits plus Medicaid cov- 
erage. Clearly, the program should have a family maximum, as 
there is for Social Security Disability. 

Third, a major problem with the program which must be ad- 
dressed is the enormous backlog of cases due, in many ways, to the 
increase in child applicants. Since the Supreme Court's Zebley deci- 
sion in February 1990, SSA has spent $2 billion on retroactive pay- 
ments to some 100,000 children. Under the new regulations which 
resulted from Zebley, the number of children on SSI has sky- 
rocketed. Nationally, the number of children on SSI grew from 
293,000 in December 1989, to 614,000 in December 1992, a 109 
percent increase. Wisconsin experienced a 134 percent growth over 
the same period as the number of children on the program in- 
creased from 6,010 to 14,070. 

SSI is doing the best it can with limited resources, but the satu- 
ration of the SSI system prevents SSA from fully reviewing finan- 
cial accounts and actively overseeing the program. For example, in 
Wisconsin, most cases have not had reviews for determination of 
disability for some 5 years. 

Fourth, although most recipients do not have experience han- 
dling large amounts of money they generally receive Zebley settle- 
ments in lump sum payments. This often leads to more question- 
able spending. The subcommittee might want to consider install- 
ments to help control this program. If it works for State lotteries^ 
it can work for SSI. Other possibilities are vouchers or "packaged" 
trusts. 



33 

Mr. Chairman, the bottom line is that the basic premise of SSI 
is noble. But is SSI the right program for disabled children in 
need? Clearly, the current program needs to be modified or other 
programs substituted. We must continue to assist those who need 
benefits the most, but we must also curb the abuses and the free- 
loading. 

Again thank you, Mr. Chairman, for this opportunity to address 
the committee. I look forward to working with you in the full com- 
mittee to reform our Nation's SSI program. 

Chairman Ford. Thank you very much. 

[The prepared statement follows:] 



34 



Statement of Gerald D. Kleczka 

Member of Congress 

Before the Subcommittee on Human Resources 

Committee on Ways and Means 

October 14, 1993 



Good morning, Mr. Chairman, and thank you for this 
opportunity to appear before the Human Resources Subcommittee 
regarding the Supplemental Security Income (SSI) program. 

With a maximum combined state and federal monthly benefit of 
$526.72 for an individual living independently, my state of 
Wisconsin has one of the largest SSI programs in the country. 

In general, I have some doubts about whether the SSI program 
for children is necessary; and, most of my testimony will focus 
on this area. 

I would like to clarify that I am not, for one moment, 
suggesting that the government's role is not to care for those 
children with disabilities who need our help. It is our role to 
assist them. However, we must place proper safeguards to ensure 
that these benefits are not abused. 

Having said that, I question whether this program, despite 
its noble goals, is appropriate. SSI is designed as a welfare 
program to supplement income for those who are blind, disabled, 
or aged. Therefore, I question why children, who are dependents, 
need to receive it. In most states, including Wisconsin, child 
SSI recipients also qualify for Medicaid (Title 19) . Besides 
medical and rehabilitation costs, which are covered under Title 
19, and special program costs, which could be covered under an 
expanded Title 19, the cost of raising a child with a disability 
is not significantly different than the cost of raising a child 
without one. We need to provide them with medical, 
rehabilitative, and special education benefits, but not 
necessarily income. Some professionals in my district suggest 
that the benefits currently given directly to families could be 
more productive if they were channeled in some fashion directly 
to schools or special programs. This would ensure that the 
benefits are used to advance the child's situation and physical 
condition. 

The current situation begs the question: is there a better 
way than SSI to provide the necessary services to low- income, 
disabled children? 

Let me share four major concerns I have with the current 
program . 

First, I am concerned that the SSI program for children is 
abused by the families of some recipients. 

Reports of such abuses abound. Some have surfaced of 
children being "coached" on actions that will help them maintain 
benefits or gain acceptance into the program. 

A particularly startling case is that of a child whose 
father was also on Social Security Disability and SSI. There 
were reports of both sexual and physical abuse of the child. 
According to local claims representatives, once the father 
learned of the Zebley decision, the child began showing up to 
school with gum in her hair, began acting up, and her grades 
dropped. She was then approved for SSI and received nearly 
$18,000 in retroactive benefits. The family purchased a car, new 
furniture, and clothes and took a vacation to Florida. They have 
since been evicted, because they had not paid their rent in six 
months. The child had a job but was instructed by the father 
"not to take too many hours, because it will make us lose your 
benefits." 



35 



Additionally, there are several examples of counselors 
reporting parents who refuse to allow their children treatment, 
fearing that improvements in their conditions would cost them 
benefits. One particularly blatant example is a counselor who 
quotes parents of a child with attention deficit disorder as 
saying, "We don't want medication, that will screw up his SSI." 

Thus, a cycle of dependency is perpetuated that only hurts 
many of these young recipients in the long run. Some benefits 
are reportedly not used to help meet the disability needs of 
children, but are instead being spent frivolously by parents. 
Under the current guidelines, the benefits a child receives are 
not necessarily linked to improving the child's situation. 

I cite the case of a woman who repeatedly called my 
Milwaukee office asking for updates on "her benefits." These 
were in fact her daughter's SSI benefits. After SSA received 
several calls from her that her checks were lost in the mail or 
her children were robbed while going to the store with her money, 
the case was investigated. The child was placed in a foster home 
when it was determined that the mother had been using the SSI 
money to purchase drugs for herself. 

Clearly, we cannot permit these abuses to continue. 

Second, there is no family limit for SSI. This means that 
some Wisconsin families, with multiple members qualified for SSI, 
can receive over $40,000 per year in tax-free benefits plus 
Medicaid coverage. Clearly, the program should have a family 
maximum as there is for Social Security Disability. 

Third, a major problem with the entire SSI system is the 
enormous backlog of cases, which is due in part to the increase 
in child applicants. Since the Supreme Court's Zebley decision 
in February 1990, SSA has spent $2 billion on retroactive 
payments to 100,000 children. Nationally, the number of children 
on SSI grew 109.4% from December 1989 to December 1992, up from 
293,320 to 614,190. In Wisconsin, the number was up 134.1% from 
6,010 to 14,070. 

SSA is doing the best it can with its limited resources. 
But, the saturation of the SSI system also prevents the agency 
from fully reviewing financial accounts and actively overseeing 
the program. For example, reviews of the determination of 
disability for most cases in Wisconsin have not been performed 
for five years, even in cases where the claims representative had 
marked the case as questionable. 

Fourth, although recipients may not have experience in 
handling large amounts of money, they generally receive Zebley 
settlements as lump-sum retroactive payments. This often leads 
to more frivolous spending by the parents of some child 
recipients. 

The subcommittee may wish to consider installments to help 
control this problem. If it works for state lotteries, it can 
work for SSI. Other possible alternatives are vouchers and 
"packaged" trusts, which could be put together at little expense. 

Mr. Chairman, the bottom line is that the basic premise of 
SSI is noble. I'm just not certain whether this program is the 
best program for low- income, disabled children. The current 
program needs to be modified or other programs substituted. We 
should continue to assist those who are in severe need and cannot 
turn elsewhere. However, we must curb the abuses which 
constitute freeloading and ultimately only hurt the U.S. taxpayer 
and fail the recipients. 

Again, thank you Mr. Chairman for this opportunity, and I 
look forward to working together to reform our nation's SSI 
program. I would be happy to answer any questions you or the 
other members of the subcommittee may have. 



36 

Chairman Ford. Mr. Slattery. 

STATEMENT OF HON. JIM SLATTERY, A REPRESENTATIVE IN 
CONGRESS FROM THE STATE OF KANSAS 

Mr. Slattery. Thank you, Mr. Chairman. First of all, let me 
thank you, Mr. Chairman, and the members of this committee for 
your assistance in passing legislation during the last Congress as 
part of the reconciliation package that addresses a very serious in- 
equity, I think, in the SSI program as it affected the children of 
military families. 

If you recall, prior to the change last year, if a person or a family 
in the military was transferred overseas they would lose their SSI 
eligibility for their children when they were transferred overseas. 
This committee, thank goodness, acted to change that law to enable 
SSI-eligible families in the military to continue to obtain SSI bene- 
fits when they are transferred overseas. 

There is still a problem, however, and the legislation that I am 
here to talk to you about today H.R. 480 corrects that problem. The 
problem that remains is a situation where a family stationed with 
the military overseas may, for example, have a newborn child that 
would otherwise be eligible for SSI-type benefits, but by virtue of 
the fact that they were born overseas, would not be eligible for SSI 
benefits. 

We are talking about a very small number of people. In fact, ac- 
cording to the Department of Defense projections, about 50 children 
per year will fall into this category. So we have these 50 children 
born overseas with military families that would otherwise be eligi- 
ble for SSI benefits that are not eligible merely by virtue of the fact 
that they are overseas. 

H.R. 480 is designed to correct that problem. And enable them 
to obtain the benefits that they would otherwise be entitled to. And 
the bottom line for me is, I don't think that these families by virtue 
of the fact that they are in the military should be denied SSI bene- 
fits that they would otherwise be eligible for. 

The cost of this program to change is about $1.5 million over 5 
years; we are talking about a small amount of money. It is pro- 
jected to cost about $300,000 per year. 

This legislation has been endorsed by the National Military Fam- 
ily Association, the Noncommissioned Officers Association. They 
played a very important role in the passage of the earlier legisla- 
tion that I have already referred to, and they are very helpful in 
passing this legislation also. 

I certainly hope, Mr. Chairman, and Mr. Santorum, that when 
you look at this area of the law, you recognize the need to make 
this correction. If you are interested in how we can pay for it, I will 
give you an opportunity to help us pay for it in the next few days 
by helping me defeat the supercollider. We will save $10 billion in 
the process, and all we need is just $1 million of the $10 billion 
to pay for what I am talking about here today. 

So if you are looking for ways to pay for it, we can certainly find 
those ways. 

Chairman Ford. Thank you, Mr. Slattery. 

[The prepared statement follows:] 



37 



STATEMENT OF 

THE HONORABLE JIM SLATTERY 

BEFORE THE 

SUBCOMMITTEE ON HUMAN RESOURCES 

OF THE 

COMMITTEE ON WAYS AND MEANS 

U.S. HOUSE OF REPRESENTATIVES 

OCTOBER 14, 1993 

Thank you, Mr. Chairman, for the opportunity to participate in 
this important oversight hearing on the Supplemental Security 
Income (SSI) program. I am pleased to be here to discuss 
legislation, H.R. 480, I have reintroduced in the 103rd Congress to 
extend eligibility for SSI benefits to all eligible children of 
military personnel stationed overseas. 

With the support of this Committee, I am pleased that it has 
been possible to correct the long-standing injustice against 
several hundred military families who previously were forced to 
forfeit their eligibility for SSI benefits when they were 
transferred overseas. These families now can continue to receive 
SSI benefits if they were eligible for benefits for the month 
before the parents were assigned to duty outside the United States, 
Puerto Rico, or the U.S. territories or possessions. 

H.R. 480, however, targets the small number of military 
families with eligible children who continue to be denied SSI 
benefits. These patriotic families are already stationed overseas 
when they find that their newborn or newly diagnosed child may be 
eligible for a monthly SSI stipend. According to Department of 
Defense projections for total active duty military sponsors 
overseas in 1995, fewer than fifty (50) children per year will fall 
into this category. H.R. 480 would ensure eligibility for these 
families who face significantly increased financial burdens as they 
attempt to provide the specialized care their child needs — while 
serving their nation abroad. 

I have corresponded with U.S. Health and Human Services 
Secretary Donna Shalala regarding H.R. 480. Secretary Shalala has 
indicated to me that it would be possible to make determinations 
regarding SSI eligibility for military personnel stationed overseas 
if the Social Security Administration is given adequate time to 
prepare for implementation of this extension of SSI eligibility. 

Further, an initial Congressional Budget Office (CBO) cost 
estimate for H.R. 480 indicates a total of $1.5 million over five 
years or an increase in direct spending of approximately $300,000 
in each fiscal year from 1994 through 1998. I welcome the 
opportunity to work with the members and staff of the House Ways 
and Means Committee to find a source of revenue to offset this 
modest expenditure. 

Finally, H.R. 480 has the endorsement and support of numerous 
military organizations including the National Military Family 
Association (NMFA) and the Non Commissioned Officers Association 
(NCOA) . I am honored to have had the opportunity to work with 
these organizations to address the needs and interests of our 
NCO's, enlisted personnel, and their families. 

Overseas assignment is considered an honor by many in the 
military. Service abroad also is an important component to a 
successful military career. The current system penalizes families 
suddenly faced with the tremendous challenge of caring for a 
disabled newborn or child while serving an overseas tour of duty. 
H.R. 480 ensures that all eligible active military personnel, 
regardless of their post assignment, will continue to receive the 
benefits to which they and their families are entitled. 

Thank you, once again, for this opportunity to testify before 
this Committee. I applaud your efforts to improve and expand the 
SSI program and I look forward to working with you to include 
military families in this important effort. I am pleased to answer 
any questions you may have regarding H.R. 480. 



38 

Chairman Ford. Mr. Ramstad. 

STATEMENT OF HON. JIM RAMSTAD, A REPRESENTATIVE IN 
CONGRESS FROM THE STATE OF MINNESOTA 

Mr. Ramstad. Thank you, Mr. Chairman. I applaud you for call- 
ing this hearing to discuss the issues related to Supplemental Secu- 
rity Income. I am particularly concerned about the impact of SSI 
on individuals with disabilities. 

When I first came to Congress with your distinguished ranking 
member in 1991, I was surprised to learn that of all the caucuses 
and task forces on the Hill, there was no group specifically focused 
on issues affecting people with disabilities. So I started the Repub- 
lican Task Force on Disabilities. Last year, under the purview of 
that task force, I held a field hearing in Minnesota concerning dis- 
incentives created by those Federal programs, mainly SSI, which 
are supposed to assist people with disabilities. In fact, Allen Jen- 
sen, who is in the room today, a very distinguished social scientist 
from the George Washington University Center for Health Policy 
Research, was one of the panelists, along with the Associate Com- 
missioner for Disability at the Social Security Administration here 
in Washington, and a number of local experts. 

Most of the experts were people with disabilities. From them I 
heard countless stories of their frustrations. People who des- 
perately want to work and contribute to society, are literally pro- 
hibited from doing so because of SSI simply because it is too expen- 
sive for them to work. 

A good example is a very close friend of mine. His name is Tom 
Haben. He's chair of the Metropolitan Handicapped Coalition in the 
Twin Cities of Minneapolis and St. Paul. He is a brilliant guy; hap- 
pens to be my same age, a person with quadriplegia. 

Tom put it this way: It is a nightmare to try to unscramble the 
SSI cobweb. The most he can make and not risk losing his benefits, 
which enable him to live as independently as he can, is $500 a 
month. God knows he is worth as much or more in salary as any- 
body around here is making, but he is locked into a job paying no 
more than $500 a month. 

Like everyone else, people with disabilities have to make deci- 
sions based on financial reality. The risk of losing vital Federal in- 
come benefits and medical assistance is too threatening to future 
financial stability, as well as physical well-being, so it discourages 
people with disabilities from maximizing not only their vocational 
potential but also their independence. 

In addition, most parents, advocates, and social workers also per- 
ceive this as too big a risk, so they advise their clients and their 
children against even trying to work. 

So Mr. Chairman, Mr. Santorum, discouraging people with dis- 
abilities from working and picking up that regular paycheck and 
eventually moving off public assistance results in a much smaller 
work force and reduced Federal revenues. It is counterproductive 
from an economic standpoint. 

It is clear to me that creating work incentives for people with 
disabilities is not just humane public policy, it is sound fiscal pol- 
icy. Eliminating the current barriers to work that so many individ- 



39 

uals face is not only the smart thing to do, it is the right thing to 
do. 

You might be aware of the legislation that our distinguished col- 
league, Pete Stark and I introduced. This legislation seeks to ad- 
dress the profound work disincentives that people with disabilities 
face because of the way Federal programs are structured and inter- 
twined with State programs. 

Several of our colleagues and several of my constituents have re- 
viewed this legislation, H.R. 3264. The consensus seems to be that 
adoption of this bill would address many of the problems generated 
by the existing SSI program. In fact, one of the groups I asked to 
review the legislation, Tasks Unlimited, is an advocacy group in 
Minnesota for people with mental illness. They have extensive ex- 
perience working with disabled adults and understand that, like 
most people in our society, people with disabilities are motivated 
to achieve, contribute, and be self-sufficient. 

This group reported that if H.R. 3264 is implemented, at least 35 
to 40 individuals in their group alone would take a chance at work- 
ing themselves off the Social Security System. So, Mr. Chairman, 
in conclusion let me say that I believe strongly that reform of the 
SSI program is desperately needed. I urge you and your committee 
to carefully consider the changes recommended in H.R. 3264; and 
again, I am grateful and strongly applaud you for holding this 
hearing and look forward to working with you to address the prob- 
lems with this system. 

Chairman Ford. Thank you very much. 

[The prepared statement follows:] 



40 



STATEMENT BY CONGRESSMAN JIM RAMSTAD OF MINNESOTA 

HUMAN RESOURCES SUBCOMMITTEE, WAYS AND MEANS COMMITTEE 

October 14, 1993 

HEARING ON SUPPLEMENTAL SECURITY INCOME 

Mr. Chairman, I strongly applaud you for calling this hearing to discuss the issues 
related to Supplemental Security Income. 

Thank you very much for allowing me to make a brief statement about the 
importance of this situation. 

While the problems relating to SSI are numerous, I am particularly concerned 
about the impact of SSI on individuals with disabilities. 

When I came to Congress in 1991, I was stunned to find that among all the 
caucuses, coalitions and task forces on the Hill, there was no group specifically 
focused on issues affecting people with disabilities. That's why I started the 
Republican Task Force on Disabilities. 

Last year, under the purview of the task force, I held a field hearing in my district 
on the work disincentives created by those federal programs -- particularly SSI 
and SSDI -- which are supposed to assist people with disabilities. 

I heard countless stories of frustrated individuals who desperately want to work 
and contribute to society but are literally prohibited from doing so because federal 
programs and rules make working too expensive for them. 

Like everyone else, the people with disabilities have to make decisions based on 
financial reality. The risk of possibly losing vital federal income benefits and 
medical assistance is simply too threatening to future financial stability, 
discouraging people from maximizing their vocational potential. In addition, most 
parents, advocates and social workers also perceive this as too big a risk and 
often discourage people from even trying to work. 

Discouraging people with disabilities from working, earning a regular paycheck 
and eventually moving off public assistance, results in a smaller work force and 
reduced federal revenues. 

It is clear that creating work incentives for people with disabilities is not just 
humane public policy, it is sound fiscal policy. Eliminating the current barriers to 
work that so many individuals face is not just the smart thing to do, it's the right 
thing to do. 

As you may know, I have joined your esteemed colleague on the Ways and 
Means Committee, Representative Pete Stark, in cosponsoring legislation to 
address the profound work disincentives people with disabilities face because of 
the way the federal programs are structured. 

Several of my constituents have reviewed our legislation, H.R. 3264, and have 
indicated to me that adoption of the bill would address many of the problems 
generated by the existing SSI and SSDI programs. 



41 



Tasks Unlimited, an advocacy group in Minnesota for people with mental illness, 
has extensive experience working with disabled adults and understands that like 
most people in our society, people with disabilities are motivated to achieve, 
contribute and be as self sufficient as possible. 

Tasks Unlimited estimates that if H.R. 3264 is implemented, at least 35-40 
individuals in their group alone will take a chance at working themselves off the 
social security system. 

Mr. Chairman, reform of the SSI and SSDI programs is desperately needed. I 
urge you and your committee to carefully consider the changes recommended in 
H.R. 3264. 

Again, I strongly applaud you for holding this hearing and I look forward to 
working with you to address the problems with this system. 



42 

Chairman Ford. Mr. Faleomavaega, please. 

STATEMENT OF HON. ENI F. H. FALEOMAVAEGA, A DELEGATE 
TO CONGRESS FROM THE TERRITORY OF AMERICAN SAMOA 

Mr. Faleomavaega. Mr. Chairman and members of the sub- 
committee, I thank you for the opportunity to appear before your 
committee today. I certainly would like to commend 

Chairman Ford. Would you pass the mike over for me, please, 
Mr. Ramstad. 

Mr. Faleomavaega [continuing]. The distinguished members of 
this committee for holding this oversight hearing to determine 
ways to improve the SSI and its services to the people with low or 
no incomes who are over 65 or blind or otherwise disabled. 

In this regard, Mr. Chairman, I would also like to discuss the 
provisions of H.R. 188 and 189, which I introduced to provide equi- 
table treatment for the elderly, blind and disabled individuals re- 
siding in my district. 

As you know, Mr. Chairman, American Samoa is the only juris- 
diction in the United States that is not served by either the SSI 
or the AABD program. The only significant difference between the 
two programs, as you well know, Mr. Chairman, is how it is cur- 
rently being administered for the benefit of the five territories. The 
SSI benefits and the cost of administration are fully funded, where- 
as the AABD that is currently being used for the territories, the 
Federal Government pays 75 percent, with the territories absorbing 
25 percent of the administrative costs. 

Under the current law, in order to receive SSI benefits, a low- 
income, elderly, blind or disabled individual must reside in 1 of the 
50 States, the District of Columbia, or the Commonwealth of the 
Northern Mariana Islands. As I stated earlier, our friends from 
Guam, Puerto Rico, and the Virgin Islands currently receive the 
benefits of the AABD program, but my territory does not get AABD 
or SSI. 

I believe, Mr. Chairman, this is probably a simple oversight in 
the fact that in 1950 the Federal law provided the AABD program 
for the District of Columbia, Puerto Rico, Guam and the Virgin Is- 
lands, as well for the Northern Marianas, but not for my territory. 
I believe that this is in view also because the citizenship statutes 
were issues that were then considered by the Congress in the 
1950s. 

Mr. Chairman, we have a problem here, particularly in my dis- 
trict where the elderly population in the Territory have been 
caught between two systems. When Social Security went into effect 
in the Territory, this group of people were too old to contribute long 
enough to qualify for minimum benefits. 

On the other hand, the territorial retirement system did not 
begin until 1971. By that time, many of these people had already 
left the work force or had so little time remaining that they were 
also excluded from benefits under this system. 

Mr. Chairman, I am cognizant of the complications of extending 
the SSI program to my district, and I introduced legislation in 1991 
and again earlier this year. The cost of approximately about $1 mil- 
lion of the AABD program is to be provided, or $3 million if the 
SSI was to be administered. 



43 

As you know, the three insular areas who currently have AABD 
are also asking for inclusion in the SSI program. I support this ef- 
fort, but I also recognize the difficulties faced by this committee 
and others in including all Territories in the SSI program, mainly 
because of the anticipated increases in Federal outlays whicn 
would result from such a move. 

Mr. Chairman, I simply urge the members of the committee to 
support H.R. 188, which I had introduced to include American 
Samoa in the AABD program, which is still in operation today, and 
this bill would correct this inequity which exists under current law. 

Thank you, Mr. Chairman. I would be glad to answer any ques- 
tions. 

Chairman Ford. Thank you very much. 

[The prepared statement follows:] 



44 




STATEMENT OF 

THE HONORABLE EN I F. H. FALEOMAVAEGA 

BEFORE THE HOOSE WAYS AND MEANS COMMITTEE 

SUBCOMMITTEE ON HUMAN RESOURCES 



October 14, 1993 



Mr. Chairman and Members of the Subcommittee: Thank 
you for the opportunity to appear before your Committee 
today. Before proceeding with my remarks, I would like to 
commend you, Mr. Chairman and the distinguished members of 
this committee, for holding this oversight hearing to 
determine ways for the SSI program to improve its services 
to people with very low or no income who are over 65 or 
blind or otherwise disabled. In this regard, I would also 
like to discuss H.R. 188 and H.R. 189 which I introduced to 
provide equitable treatment for the elderly, blind, and 
disabled individuals residing in American Samoa. 

As you know, Mr. Chairman, American Samoa is the only 
jurisdiction of the United States that is not served by the 
SSI program, nor its predecessor program, the Aid to the 
Aged, Blind, or Disabled (AABD) . SSI and AABD are basically 
the same in design. The only significant difference between 
the two programs is funding. With SSI, benefits and the 
cost of administering the program are fully financed by the 
Federal Treasury. On the other hand, the Federal Government 
pays 75 percent of AABD benefits up to a specified limit and 
the States absorb 25 percent. Administrative cost is shared 
by both the Federal Government and the States at 50 percent 
each. 

Under current law, in order to receive SSI benefits, a 
low-income elderly, blind or disabled individual must reside 
in one of the 50 states, the District of Columbia, or the 
Commonwealth of the Northern Mariana Islands. For qualified 
individuals who reside in Guam, Puerto Rico, or the Virgin 
Islands, similar benefits are available to them through the 
AABD program. Unfortunately, the elderly, blind and 
disabled individuals in American Samoa who have low or no 
income are not covered by either program. 



45 



Mr. Chairman, this is yet another example of a vital 
program extended to all 50 States, the District of Columbia, 
Puerto Rico, Guam, Virgin Islands, and the Northern Mariana 
Islands, but not American Samoa. I believe this say have 
been an oversight when Puerto Rico and the Virgin Islands 
were included in the AABD program in 1950, and Guam after 
1952. 

According to a recent survey in American Samoa, there 
are now approximately 3,500 elderly, blind and disabled 
individuals with low or no income. These individuals are 
without resources which are available to other Americans who 
reside in other parts of the United States. 

In addition, Mr. Chairman, the elderly population in 
American Samoa have been caught between two systems. When 
Social Security went into effect in Samoa, this group of 
people were too old to contribute long enough to qualify for 
minimum benefits. On the other hand, the territorial 
retirement system did not begin until 1971. By that time, 
many of these people had already left the work force or had 
so little time remaining that they were also excluded from 
benefits under this system. 

In each Congress since 1990, I have introduced 
legislation to include Samoa's elderly, blind and disabled 
population in the SSI program to address their critical 
financial needs. In 1990, it was estimated that 
approximately 1,600 such individuals reside in the 
Territory. The Congressional Budget Office estimated that 
if SSI was in place in American Samoa in 1993, Federal 
outlays would be about $3 million higher than under current 
law. 

During the 101st and 102nd Congresses, the Bush 
administration, through the Commissioner of Social Security, 
opposed extending SSI to Samoa due to cost considerations. 

Mr. Chairman, because I am cognizant of the 
complications of extending the SSI program to American 
Samoa, I introduced legislation in 1991, and again earlier 
this year, to include Samoa in the AABD program which 
currently exists in the other three insular areas. A cost 
estimate prepared by the Congressional Budget Office 
indicates that Federal outlays would increase by $1 million 
if AABD were in place in American Samoa. 

As you Know, the three insular areas who currently 
have AABD are also asking for inclusion in the improved 
supplemental security income program. I support this effort 
but I also recognize the difficulties faced by this 
Committee and others in including all territories in the SSI 



46 



program mainly because of an anticipated astronomical 
increase in Federal outlays which would result from 
such a move. 

Should the Committee determine that it is not possible 
to include American Samoa in SSI at this juncture, I urge 
the members of the Committee to support H.R. 188 which 
proposes to include American Samoa in the AABD program which 
continues to operate in the other three insular areas. This 
bill will correct this inequity which exist under current 
law. 

Thank you once again Mr. Chairman for allowing me to 
testify today on behalf those Americans who are denied vital 
services due to an unintentional oversight on the part of 
the U.S. Congress. 



47 

Chairman Ford. Let me thank all four of our colleagues for the 
testimony that you have given before the subcommittee today. 

Mr. Kleczka, let me ask you this. 

Let me first express concerns similar to those you have expressed 
in your testimony before the subcommittee today. In fact, my staff 
has met with officials in the Inspector General's Office of the De- 
partment of Health and Human Services about some of the alleged 
abuses that you have already discussed in your testimony before 
the subcommittee today. 

I understand that the Inspector General's Office will be issuing 
a report later on her findings and recommendations, and I want to 
assure you and others that this subcommittee will make a careful 
review of those findings by the Inspector General's Office. 

But you are suggesting, I guess, in your testimony that SSI bene- 
fits not be given to children with disabilities. Would it be better to 
give them some type of service to overcome their disability? Is that 
what I am hearing in your testimony? 

Mr. Kleczka. Yes, Mr. Chairman. As I indicated, these children 
are eligible for title 19. Clearly, if the child has a disorder, we want 
to help them out; so if in fact the current provisions of title 19 don't 
cover their disorder, I think we should probably amend title 19 to 
make sure that help is available versus just giving a stipend. 

In the State of Wisconsin, maximum benefits are in excess of 
$500. There is no mandate that those dollars be used on medical 
treatment for the child. 

Chairman Ford. Mr. Slattery, you also talked about the $1.5 mil- 
lion that we need for the military children. 

I know you talked about the supercollider. I am going to vote 
with you on that from this subcommittee and in the Ways and 
Means Committee. We really need to fine tune the mechanism 
within the jurisdiction of the committee itself. I certainly appre- 
ciate your recommendations in providing the billions of dollars that 
will be needed. 

Let me ask you this: I know we are going to have to find some 
way to fund it. I think this is an area that we are going to have 
to address. But I would really like to know from you, tell me, how 
would the Social Security Administration process such claims when 
there is no State disabilities determination in these other coun- 
tries? Would we use the military for the basic determination of dis- 
abilities? 

Mr. Slattery. Mr. Chairman, we have contacted and chatted 
with Secretary Shalala regarding this very question, and she ad- 
vises us that it would be possible for the Social Security Adminis- 
tration to administer this change if they were given adequate time 
to prepare for it. 

Chairman Ford. Madam Secretary, did she make recommenda- 
tions as to how it would be physically done, contracted to the mili- 
tary? 

Mr. Slattery. She didn't get into that level of detail, but she cer- 
tainly indicated that it could be done; and I would personally think 
that perhaps the military could provide the information required, 
perhaps the military personnel or the military families, home State 
criteria would be used to administer this. That is a possibility. 



48 

Chairman Ford. My concern would be just that component, the 
determination, how will the determination be made? I mean, if we 
could get some clarification in that area, Jim, I think it is a bill 
that we could probably mark up and move on. It is an area that 
we must address, but the determination factor, if we can continue 
to make some recommendations to this subcommittee over the next 
couple of weeks, it is an area that we could probably move on. 

Mr. Slattery. Let us follow up with Secretary Shalala and find 
out what she would recommend in terms of the best administrative 
approach for us to use. But I don't see any reason why this income 
information could not be handled through the military, and if not 
that, why, in some instances — and I would assume that most of 
these families would have a State of residence in this country — the 
normal process would be followed there to determine their eligi- 
bility. 

So either/or. Again, I think we are only talking about 50 families, 
so it shouldn't be an insurmountable problem, I wouldn't think. 

Chairman Ford. OK. Mr. Santorum. 

Mr. Santorum. Thank you, Mr. Chairman. Mr. Kleczka, I must 
say that I was very impressed, and I consider this to be some cou- 
rageous testimony. I don't normally hear this kind of testimony 
from members about welfare programs, because they are very po- 
litically sensitive; and I commend you greatly for coming to this 
committee and saying what you are suggesting. Frankly, it is not 
something I had looked at, and frankly, you may have really identi- 
fied a very important issue for this subcommittee. 

Have you put together a bill or do you have anything beyond the 
testimony that we might be able to look at and work from? 

Mr. Kleczka. OK Mr. Santorum, I have not introduced legisla- 
tion at this point. As the Chairman indicated, the IG is coming out 
with a report — I believe it is within the next 2 months — and based 
on what is contained in that report, I think — in concert with your- 
self and your committee, we should start looking at some alter- 
natives to try to clean up the system. 

You know, as a State legislator, I was always very supportive of 
SSI, and that is probably one reason why Wisconsin has one of the 
biggest supplements. Our per-person total is $526. However, when 
you see a program that, as I indicated, was noble and was working 
to help the disabled, blind, and aged, but is now being abused, I 
think it is time that this Congress take note of that and correct it. 

I heard the previous speaker, as I was waiting to testify, say that 
we would like to increase the benefits for those currently on the 
system. You know — and in fact there is need there — I would like 
to do that, but once the public is presented with some of the abuses 
like I brought forward, there may not be a hue and cry to tamper 
with the program. 

I might add that the information I have shared with you today 
comes from a series of Milwaukee Journal articles, one of the major 
newspapers in the State of Wisconsin. We are constantly receiving 
calls in our Milwaukee office, not only from SSI employees or SSA 
employees and former employees, but also receiving calls now from 
teachers who have to fill out these evaluation forms. And in some 
districts and in some schools, these teachers are deluged with these 
forms to provide an assessment of the children. 



49 

And you can just look at the increase in the number of children 
on the program — you know, over a period of 3 years, a 109 percent 
increase. We know something is wrong, and my fear is that some 
folks out there think they have found a program that is easy to get 
on, that is going to provide big Federal benefits; and sorry to say, 
I think it is being abused in some instances. 

Mr. Santorum. Again, I appreciate your testimony very much. I 
look forward to working with you and the subcommittee and full 
committee on coming up with a solution. 

Mr. Ramstad, as you know we were in Republican Conference 
yesterday, working on our welfare reform proposal; and many of 
the things that we had in the bill were addressing the problem of 
work disincentives for people on public assistance. We had some 
provisions in the bill with regard to housing disincentives and the 
laws and increasing of rents of people who decide to go off public 
assistance and go out to work. Your proposal falls under the same 
category. 

The question I have is the question we always have here and 
that is, how much is this going to cost. Do you have any CBO esti- 
mates? 

Mr. Ramstad. In fact, right now the CBO is working on those 
statements. We haven't received them yet. 

Mr. Santorum. OK. I would again suggest to you that this kind 
of legislation is certainly in the area that I think everyone in Amer- 
ica is crying for. Taxpayers want us to quit putting up barriers to 
people who want to go out and work and be productive in the main- 
stream of our society. I would support that as long as we can fash- 
ion a way to do it without breaking the piggy bank. 

Mr. Ramstad. If I may respond briefly, make no mistake about 
it, there will be a cost to this transition. To enable these people, 
to empower these people to get out of SSI and to be gainfully, or 
more gainfully employed in some cases will allow them to enjoy the 
dignity of independent living and then become productive, contrib- 
uting taxpayers. So in the long run, it is my hypothesis that this 
will actually be a cost-saving benefit to the Treasury. 

Mr. Santorum. And I would agree with that, and the only prob- 
lem is that CBO doesn't necessarily always agree with the way 
that I think common sense would work. But I would be anxious to 
work with you, and in fact, depending on when you get those cost 
estimates, even consider adopting your legislation as part of the 
program that we adopted in conference yesterday. 

Thank you, Mr. Chairman. 

Chairman Ford. Thank you very much. 

I thank my colleagues. 

Chairman Ford. The committee would like to call on the Na- 
tional Association for Hispanic Elderly, David A. Affeldt; Hardy 
and Associates, Dorcas R. Hardy, president, and the former Com- 
missioner of the Social Security Administration; Samuel J. Sim- 
mons, the National Caucus and Center for Black Aged. He is presi- 
dent and chief executive officer. Also Ethel Zelenske, who is with 
the National Senior Citizens Law Center. She is a staff attorney. 

I would like you to please be seated. The Chair is going to recog- 
nize you in the order you were called. Mr. Affeldt, I am going to 



50 

recognize you first, and then the order that I called the names out: 
Mr. Simmons, Ms. Hardy, and Ms. Zelenske. 
Mr. Affeldt, the Chair recognizes you at this time. 

STATEMENT OF CARMELA G. LACAYO, PRESIDENT AND CHIEF 
EXECUTIVE OFFICER, NATIONAL ASSOCIATION FOR HIS- 
PANIC ELDERLY, AS PRESENTED BY DAVID A. AFFELDT, 
CONSULTANT 

Mr. Affeldt. Thank you very much, Congressman Ford and 
members of the subcommittee. 

Because of time constraints, I shall just focus on two key issues 
for older Hispanics, first, the need to raise SSI benefits, and sec- 
ond, outreach. The Association has other recommendations which 
are included in our longer written statement. 

Aged Hispanics are confronted with a whole host of problems and 
challenges during the 1990s. However, none is more important or 
formidable than inadequate income. Virtually every major problem 
affecting older Hispanic-origin persons has some linkage with in- 
sufficient income. Older Hispanics have one of the higher poverty 
rates among older Americans. Hispanics 65 years of age or older 
were more than twice as likely to be poor as elderly white 
nonHispanics during 1992, 22 percent versus 10.4 percent. This 
historic ratio has prevailed for several years. 

Poverty for older Hispanics is likely to be long term in that it 
tends to be persistent and, unfortunately, inescapable. In many re- 
spects, Hispanic older persons represent an underclass in our soci- 
ety that has often been beyond the reach of conventional strategies. 

SSI offers the most direct and cost-effective means to improve 
the economic well-being of aged Hispanics and other low-income 
older Americans because it focuses on the most needy elderly peo- 
ple in our society. These facts underscore the need to strengthen 
and improve SSI. 

As a practical matter, the poverty rate for elderly Hispanics and 
other low-income older Americans is not likely to be reduced appre- 
ciably in the years ahead unless SSI is strengthened. 

Two major sources of income for elderly Hispanics, Social Secu- 
rity and SSI, have typically played, at best, a catch up game with 
inflation. Cost-of-living adjustments for Social Security and SSI are 
certainly necessary and crucial to aged Hispanics and other older 
Americans. However, it is important to recognize that COLAs alone 
will not permit older poor persons to escape from poverty's 
clutches. 

Unfortunately, our Nation does not have an income strategy for 
Social Security or SSI other than annual COLAs. Social Security 
beneficiaries have essentially received only COLAs since the auto- 
matic adjustment mechanism first became effective in 1975. SSI re- 
cipients have had only one benefit hike exceeding the inflation rate 
since the program began to pay benefits in 1974. However, it was 
linked to a 6-month delay in the Social Security COLA under the 
1983 Social Security amendments. 

For these reasons, the Association urges that the Federal SSI 
standard be raised as soon as possible above the poverty line. 

Congress clearly intended that SSI should eventually provide an 
income floor which would enable the aged, blind ana disabled to 



51 

live above the poverty line. The SSI modernization panel has rec- 
ommended that the SSI benefits standard be raised. 

Congresswoman Carrie Meek has introduced legislation, H.R. 
2676, the 1993 SSI Reform Act, which would carry out these rec- 
ommendations. We fully recognize, though, that budgetary consid- 
erations may require that the goal of raising the Federal SSI bene- 
fits along the lines recommended by the SSI Modernization Panel 
will probably require implementation on an incremental basis. 
However, this should not deter our Nation from working expedi- 
tiously to implement this objective. 

It is crucial, in the judgment of the Association, that our Nation 
begin now to work toward this goal, even if budgetary constraints 
necessitate a modest increase above annual SSI COLAs. A few 
extra dollars a month can enable an SSI recipient to avoid the di- 
lemma of deciding between food necessary for nourishment or 
medicines to maintain one's health. 

We must also remember that time is not on the side of the elder- 
ly. Therefore, we believe that it is essential to act soon to raise SSI 
benefits. 

Many elderly Hispanics, as well as other low-income Americans, 
are eligible for both means-tested and entitlement programs that 
they did not receive. In 1992, only 29.2 percent of Hispanic aged 
Americans lived in households that received means-tested cash as- 
sistance. 

Unfortunately, a large proportion of potentially eligible persons 
do not receive SSI because they do not know about the program or 
have insufficient knowledge. Older Hispanic-origin persons have an 
added dilemma and that is language. 

I see the caution light is on. So, let me just summarize my state- 
ment very briefly then. We have a three-pronged approach to im- 
prove outreach. First, we believe there should be a dedicated per- 
centage of SSI administrative funds earmarked for SSI outreach in 
order to have a permanent, ongoing outreach program at the Social 
Security Administration. 

Second, bilingual outreach workers should be in areas where 
large concentrations of limited English-speaking or nonEnglish- 
speaking populations reside. 

Third, a senior-to-senior approach should be employed as one 
crucial component in the overall outreach strategy. 

Now, in conclusion, the Association strongly endorses the key 
recommendations of the SSI Modernization Panel. We favor Con- 
gresswoman Meek's bill, H.R. 2676. We fully recognize that it may 
be necessary to implement these recommendations on a phase in 
basis because of cost considerations. 

However, the key feature from the standpoint of the Association 
and elderly Hispanics is that future SSI legislation should have 
some type of benefit increase to launch an income strategy to come 
to grips with the growing poverty problem affecting older Ameri- 
cans, and aged minorities in particular. This is essential. And we 
believe there should be no compromise on this fundamental prin- 
ciple. 

Thank you. 

Chairman Ford. Thank you very much. 

[The prepared statement follows:] 



52 



TESTIMONY OF CARMELA G. LACAYO 
NATIONAL ASSOCIATION FOR HISPANIC ELDERLY 

The Asociacion National Pro Personas Mayores (National Association 
for Hispanic Elderly) is pleased to testify at this oversight hearing on 
Supplemental Security Income. 

Aged Hispanics are confronted with a whole host of problems and 
challenges during the 1990's. However, none is more important, nor more 
formidable, than inadequate income. Virtually every major problem affecting 
older Hispanic-origin persons has some linkage with insufficient income. 

Older Hispanics have one of the higher poverty rates among older 
Americans. Hispanics 65 years of age or older were more than twice as likely 
to be poor as elderly White, non-Hispanics during 1992: 22.0 percent vs. 10.4 
percent. This historical ratio has prevailed for several years. 

Poverty for older Hispanics is likely to be long-term in that it tends to be 
persistent and, unfortunately, inescapable. As a consequence, numerous aged 
Hispanics find themselves mired in poverty's vice-like grip. This has caused 
great despair for the Hispanic elderly population. In many respects, Hispanic 
older persons represent an underclass in our society that has often been beyond 
the reach of conventional strategies. 

SSI, though, offers the most direct and cost-effective means to improve 
the economic well-being of aged Hispanics and other low-income older 
Americans because it focuses on the most needy elderly persons in our society. 

Abolition of Poverty: The Top Priority Goal 

These facts underscore the need to strengthen and improve SSI. As a 
practical matter, the poverty rate for elderly Hispanics and other low-income 
older Americans is not likely to be reduced appreciably in the years ahead 
unless SSI is significantly strengthened. 

The major sources of income for elderly Hispanics - Social Security and 
SSI - have typically played, at best, a "catch-up game" with inflation. Cost-of- 
living adjustments (COLAs) for Social Security and SSI are certainly necessary 
and crucial for aged Hispanics and other older Americans. However, it is 
important to recognize that COLAs alone will not permit older poor persons to 
escape from poverty's clutches. 

Unfortunately, our nation does not have an income strategy for Social 
Security or SSI - other than annual COLAs. Social Security beneficiaries have 
essentially received only COLAs since the automatic adjustment mechanism 
first become operational in 1975. 

SSI recipients have had only one benefit hike exceeding the inflation rate 
since the program began to pay benefits in 1974. However, this was linked to 
a six-month delay in the social Security COLA under the 1983 Social Security 
Amendments. 

For these reasons, the Asociacion urges that the federal SSI benefit 
standard be raised, as soon as possible, above the poverty line. Congress 
clearly intended that SSI should eventually provide an income floor which 
would enable the aged, blind, and disabled to live above the poverty line. 

The SSI Modernization Panel has recommended that the federal SSI 
benefit standard be raised eventually to 120 percent of the poverty threshold. 
Congresswoman Carrie Meek has introduced the 1993 SSI Reform Act (H.R. 
2676), which would carry out this recommendation and others developed by the 
SSI Modernization Panel. The Asociacion strongly supports H.R. 2676. 



53 



We fully recognize, though, that budgetary considerations may require 
that the goal of raising the federal SSI benefit to 120 percent of the poverty 
threshold may require implementation on an incremental basis. However, this 
should not deter our nation from working expeditiously to implement this 
objective. It is crucial, in the judgment of the Asociacion, that our nation must 
begin now to work toward this goal, even if budgetary constraints necessitate a 
modest increase above annual SSI COLAs. A few extra dollars a month, 
though, can enable an SSI recipient to avoid the dilemma of deciding between 
food for necessary nourishment or medicines to maintain one's health. We must 
also remember that time is not on the side of the elderly. Therefore, it is 
essential for the Human Resource Subcommittee to act now to raise SSI 
benefits. 

Outreach and Bilingual Services 

Many elderly Hispanics, as well as other low-income older Americans, 
are eligible for both means-tested and entitlement programs that they do not 
receive. In 1992, only 29.2 percent of Hispanic aged poor persons lived in 
households that received means-tested cash assistance. 

Unfortunately, a large proportion of potentially eligible persons do not 
receive SSI because they do not know about the program or they have 
insufficient knowledge. Many older Americans also have major misconceptions 
or erroneous beliefs. Aged Hispanic-origin persons often have an added 
burden: language. This can be a formidable barrier for them to qualify for SSI 
or other means-tested programs. 

The Asociacion strongly believes that effective outreach is essential to 
assure greater Hispanic participation in SSI, as well as for other low-income 
elderly persons. Basically, we support a three-prong approach: 

1. There should be a dedicated percentage of SSI administrative 
funds earmarked for SSI outreach in order to have permanent, 
ongoing outreach activities at the Social Security Administration. 

2. Bilingual outreach workers should be in areas where large 
concentrations of limited English-speaking or non-English- 
Speaking populations reside. 

3. A senior- to senior approach should be employed as one crucial 
component of an overall outreach strategy. The Asociacion has 
found this approach to be an effective technique because many 
potentially eligible SSI recipients are more comfortable being 
helped by older persons, especially if they are friends or 
acquaintances or if they are bilingual in the case of Hispanic 
applicants. 

We also support outreach for Social Security, since older Hispanics have 
a lower participation rate than for other groups. 

Eliminate More Restrictive Criteria for Medicaid 

All states now provide Medicaid coverage for some SSI recipients. 
Current law requires states to provide Medicaid for the mandatory categorically 
needy. States, though, can use a more restrictive standard or set of standards 
than the SSI definition for the mandatory categorically needy aged, blind, and 
disabled. Some, in fact, do. 



54 



These major restrictive criteria for Medicaid can be a major problem for 
SSI recipients with infirmities. Quite often, Medicaid coverage can be 
more valuable than SSI, especially for those recipients with major 
medical bills. 

Therefore, the Asociacion urges that states should not be able to use 
eligibility criteria that age more restrictive for the mandatory categorically 
needy than those governing SSI. 



Repeal One-Third Reduction 

SSI recipients now have their basic benefit reduced by one-third if they 
reside in the household of another and receive in-kind maintenance and support. 

In some respects, this provision is anti-family because it discourages 
family members from helping less fortunate relatives. 

It clearly works against the interests of SSI recipients who are members 
of minority groups because the extended family concept is more prevalent for 
minority families than for Anglo families. 

As a practical matter, this measure is misunderstood by numerous SSI 
recipients. Moreover, Social Security personnel probably misconstrue this 
provision frequently when they administer the one-third reduction measure. 

We, therefore, support repeal of the existing one-third recommendation. 
We back Congressman Meek's approach in H.R. 2676, and urge the 
subcommittee to approve it. 

Update the Resource Limits 

The Asociacion favors updating the countable resource ceiling to make 
appropriate adjustments for rising prices since the program began in 1974. 
Currently, the countable asset limitation is $2,000 for a qualifying individual 
and $3,000 for an eligible couple. 

The rules governing countable resources must also be simplified. We 
urge the Social Security Administration to work with organizations representing 
the aged, blind, and disabled to simplify the applicable rules for determining 
and counting resources. 

We also support the SSI Modernization Panel recommendation to update 
the SSI resource limitation. We believe that H.R. 2676, which would increase 
the countable asset ceiling from $2,000 to $7,000 for qualifying individuals and 
from $3,000 to $10,500 for eligible couples, would be an effective approach to 
implement this recommendation. If the Human Resources Subcommittee wishes 
to limit the cost of this recommendation, the proposal could be phased-in on an 
incremental basis. 



55 



Conclusion 

In conclusion, the Asociadon strongly supports key recommendations of 
the SSI Modernization Panel. We also strongly endorse the 1993 SSI Reform 
Act to implement those proposals. We fully recognize that it may be necessary 
to implement those recommendations on a phased-in basis because of cost 
considerations. 

However, the key feature from the standpoint of the Asociadon and 
elderly Hispanics is that future SSI legislation should have some type of benefit 
increase to launch an income strategy to come to grips with the growing 
poverty problem affecting older Americans, and aged minorities in particular. 
This is essential. We further believe that there should be no compromise on 
this fundamental principle. 



56 

Chairman Ford. Mr. Simmons. 

STATEMENT OF SAMUEL J. SIMMONS, PRESIDENT, NATIONAL 
CAUCUS AND CENTER ON BLACK AGED, INC. 

Mr. Simmons. Congressman Ford and Congressman Santorum, 
the National Caucus and Center on Black Aged welcomes the op- 
portunity to testify at this hearing. At the outset, we want to com- 
mend you for calling this timely hearing. 

We have a longer statement, which I would like to be included 
in the record, and I will just go ahead and summarize. 

The recent Census Bureau report on poverty in the United States 
provides a grave reminder that United States has a serious and 
growing economic problem, for today the United States has a huge 
and growing underclass. Poverty is concentrated to a large degree 
among the young and aged in our society. The most recent Census 
Bureau statistics provide clear and convincing evidence that pov- 
erty is still a problem for older Americans despite important gains 
made during the 1970s and late 1960s. 

About 4 million Americans, 65 years of age or older, were poor 
in 1992. Poverty for older Americans has increased by more than 
600,000 during the past 3 years from 3.36 million in 1989 to 3.983 
million in 1992. This disturbing trend continued during the past 
year as the number of poor older Americans grew by 202,000. 

Poverty is especially widespread and deep rooted for aged minori- 
ties, particularly African-Americans. Nearly 900,000 — 887,000 aged 
blacks, 1 out of 3 African- American, 65 years of age or older, were 
poor in 1992. 

Older blacks were more than three times as likely to live in pov- 
erty as aged white nonHispanics during 1992. In other words, 33.3 
percent versus 10.4 percent. These figures dramatically under- 
scored the need to improving SSI benefits for elderly persons in the 
United States. 

SSI reform without some type of benefit increase would be a 
tragic disappointment for the aged poor and e specially older Afri- 
can-Americans who are disproportionately poor. That is why 
NCBA's number one legislative objective is to raise the SSI Federal 
benefit level to above the poverty line. We, however, are realistic 
in recognizing that budgetary considerations and cost constraints 
may necessitate incremental increases and perhaps modest in- 
creases initially. NCBA believes, though, that it is absolutely indis- 
pensable to start the process now by enacting benefit increases and 
in a soundly conceived and fiscally responsible matter. 

SSI recipients have waited long for an adjustment in their bene- 
fits. SSI has been operational since 1974; however, there has been 
only one adjustment above the poverty level, but this was coupled 
with a 6-month delay in 1983 and 1984 and the Social Security 
cost-of-living adjustment. This postponement in the COLA denied 
elderly and other Social Security beneficiaries, as a group, $4.3 mil- 
lion in fiscal year 1986 alone. Their future Social Security benefits 
are lower than they would otherwise be because of the 
compounding effect of the delay. 

Congress did not provide an income standard equal to the pov- 
erty when it created SSI. However, the legislative history is clear 



57 

that Congress established the SSI to eliminate the ugly cancer of 
poverty for the aged and disabled. 

The Senate Finance Committee made a point emphatically when 
it said, "SSI would create a new Federal program administered by 
Social Security to provide a positive assurance that the Nation's 
aged, blind and disabled people would no longer have to subsist on 
below-poverty incomes." 

However, the SSI standards are still below the poverty threshold. 
The maximum benefit is 75 percent of the census poverty threshold 
for an individual and about 90 percent for an aged couple. The 
maximum Federal benefit in 1993 is $434 for an individual — a 
month for an individual, and $652 for an eligible couple. 

A unique opportunity exists now for action to make the urgently 
needed changes. You have heard earlier today about the rec- 
ommendations of the Modernization Panel, and we concur with 
that. We are also strongly in favor of the SSI Reform Act, H.R. 
2676, that has been introduced by Congresswoman Meek; and also 
we— SSI— H.R. 2676 would raise the Federal SSI level to 100 per- 
cent of poverty by 1996, thereafter taking it to 120 percent by 1998. 

We also concur with what has been said earlier in terms of re- 
pealing the one-third reduction rule and other administrative 
changes for SSI. 

I would just like to say that we have a challenge and an oppor- 
tunity to move ahead to begin doing something to ensure that the 
elderly in this country do not have to live in poverty. We know that 
it cannot be done overnight, but we think that, at a minimum, the 
process ought to be started so that we can do it on an incremental 
basis. Otherwise, if we don't get it started, it will never be done. 

Chairman Ford. Thank you very much. 

[The prepared statement follows:] 



58 



STATEMENT OF SAMUEL J. SIMMONS 
NATIONAL CAUCUS AND CENTER ON BLACK AGED, INC. 

Congressman Ford and Members of the Human Resources 
Subcommittee, the National Caucus and Center on Black Aged (NCBA) 
welcomes the opportunity to testify at this hearing. At the outset 
we wish to commend you for holding this timely and important 
hearing. 

The recent Census Bureau report on poverty in the U.S. 
provides a grim reminder that the U.S. has a serious and growing 
economic problem. Poverty in the U.S. continued its ominous and 
upward spiral during the past year, as 1.172 million Americans were 
added to the poverty rolls. Overall, 36.880 million were poor in 
the U.S. This figure is roughly equivalent to the entire 
population of Poland. The number of persons living in poverty in 
the U.S. is at the highest level since 1962, when 38.625 million 
Americans were poor. 

The poverty rate for the total U.S. population grew from 14.2 
percent in 1991 to 14.5 percent in 1992. The 1992 poverty rate was 
higher than at any time during the 1970 's and exceeded the level 
for much of the 1960 's In 1966, the U.S. poverty rate was 14.7 
percent, which is essentially the same level as in 1992 (slightly 
more than a quarter of a century later) . 

Today the U.S. has a huge and growing underclass. Poverty is 
concentrated, to a large degree, among the young and aged in our 
society. Persons under the age of 18 had the highest poverty rate 
(21.9 percent) in 1992, followed by people 18 to 24 years old (18.0 
percent) . Individuals 75 or older had the third highest poverty 
rate in 1992: 16.2 percent. 

The most recent Census Bureau statistics provide clear and 
convincing evidence that poverty is still a major problem for older 
Americans, despite important gains made during the 1970 's and late 
1960's. Almost 4 million Americans 65 years of age or older were 
poor in 1992. Poverty is a bare bones existence. Under the Census 
Bureau definition, an elderly person was poor in 1992 if his or her 
annual income fell below $6,729 — basically $129 a week to pay for 
food, housing, medical care, transportation, clothes, and other 
everyday necessities. A couple with an aged head was poor if their 
annual income was less than $8,487 ($163 a week). 

The extent of poverty for older Americans would be even 
greater if the same poverty thresholds were used for people 65 or 
older as for persons under age 65. In 1992, the poverty threshold 
for an individual 65 or older was 92 percent of that for a single 
person under age 65 ($6,729 vs. $7,299). It was 90 percent of the 
poverty threshold for a two-person household with a head under age 
65 ($8,487 vs. $9,443) . 

Poverty for older Americans has increased by more than 600,000 
during the past three years, from 3.363 million in 1989 to 3.983 
million in 1992. This disturbing trend continued during the past 
year, as the number of poor older Americans grew by 202,000. 

Poverty is especially widespread and deep-rooted for aged 
minorities, particularly elderly African-Americans. Nearly 900,000 
(887,000) aged Blacks — one out of every three African-Americans 
65 years of age or older — were poor in 1992. Older Blacks were 
more than three times as likely to live in poverty as aged White, 
non-Hispanics during 1992: 33.3 percent vs. 10.4 percent. 

Elderly African-American women are an especially vulnerable 
group. Three out of every eight (37.7 percent) Black females aged 
65 or older were poor in 1992. Quite clearly, one of the most 
economically deprived groups in our entire society today is elderly 
African-American women living alone. Nearly three out of five 
(57.9 percent) were poor in 1992, and nine out of ten (89.3 
percent) were economically vulnerable. They had annual income 
below twice the poverty line. 



59 



Poverty is exceptionally high for African-Americans 75 years 
of age or older. Their poverty rate in 1992 was very close to the 
level for Black youngsters and teenagers (persons under 18 years of 
age): 40.0 percent vs. 46.6 percent. 

A. Raise SSI Benefits Above the Poverty Line 

These figures dramatically underscore the need for improving 
SSI benefits for elderly persons in the U.S. SSI reform without 
some type of benefit increase would be a tragic disappointment for 
the aged poor, and especially older African-Americans who are 
disproportionately poor. 

This is why NCBA's number one legislative objective is to 
raise the SSI federal benefit standard to above the poverty line. 
We are realistic in recognizing that budgetary considerations and 
cost constraints may necessitate incremental increases, and perhaps 
modest increases initially. NCSA believes, though, that it is 
absolutely indispensable to start the process now by enacting 
benefit increases in a soundly conceived and fiscally responsible 
manner. 

SSI recipients have waited far too long for an adjustment in 
their benefits. SSI has been operational since 1974. However, 
there has been only one adjustment above the cost-of-living, but 
this was coupled with a six-month delay (from July 1983 to January 
1984) in the Social Security cost-of-living adjustment (COLA). 
This postponement in the Social Security COLA denied elderly and 
other Social Security beneficiaries, as a group, $4.3 billion in 
fiscal year 1986 alone. Their future Social Security benefits are 
lower than they would otherwise be because of the compounding 
effect of this delay. 

Congress did not provide an income standard equal to the 
poverty line when it created SSI. However, the legislative history 
is clear that Congress established SSI to eliminate the ugly cancer 
of poverty for the aged and disabled. The Senate Finance Committee 
report made this point emphatically when it said SSI would "create 
a new federal program administered by the Social Security 
Administration (SSA) to provide a positive assurance that the 
nation's aged, blind and disabled people would no longer have to 
subsist on below-poverty incomes." 

However, the SSI income standards are still below the poverty 
thresholds. The maximum federal SSI benefit in 1992 represented 
only 75 percent of the Census Bureau poverty threshold for an 
elderly individual and about 90 percent of the poverty threshold 
for an aged couple. 

Comparison of 1992 SSI Standards and the Census Bureau's 
Poverty Thresholds for Aged Individuals and Couples 



ReciDient 


Annual SSI 
Standard 


Poverty 
Thresholds 


Percent of Poverty 
Thresholds 


Individual 


$5,064 


$6,729 


75.3% 


Couple 


$7,596 


$8,487 


89.5% 



Sources: Supplemental Security Income Modernization Project: 

Final Report Of The Experts . August 1992, p. 24. 

Poverty in the United States : 1992 . Current Population 
Reports, Consumer Income, Series P60-185, U.S. Department 
of Commerce, Economics and Statistics Administration, 
Bureau of the Census, September 1993, p. vii. 



60 



The maximum monthly federal SSI benefit payable in 1993 is 
$434 for a qualifying individual ($5,208 per year) and $652 for an 
eligible couple ($7,824 per year). 

A unique window of opportunity exists now for action to make 
urgently-needed SSI changes. An SSI Modernization Panel, a 
prestigious advisory unit chaired by Dr. Arthur S. Flemming, has 
provided a blueprint for reform. This report represents the first 
time in the history of SSI that a detailed analysis of its 
activities and impact on beneficiaries has been undertaken. 

All panel members believe that the current SSI benefit 
standard is inadequate and favor, at a minimum, increasing it to 
100 percent of the poverty guideline. A majority support raising 
the SSI benefit standard to 120 percent of the poverty guideline 
because they believe needy people "could not attain a minimally 
decent standard of living at 100 percent of the guideline." 

Representative Carrie Meek has introduced the 1993 SSI Reform 
Act (H.R. 2676) , which would implement key recommendations of the 
SSI Modernization Panel. S. 2676 would raise the federal SSI 
benefit standard to 100 percent of the poverty threshold by 1996. 
Thereafter, the federal benefit standard would increase 
incrementally until it reaches 120 percent of the poverty threshold 
by 1998. 

NCBA strongly supports the Meek bill and urges Congress to 
enact this measure into law as soon as possible. We fully realize 
that budgetary constraints and cost considerations may prevent 
immediate enactment of the 1993 SSI Reform Act. Consequently, NCBA 
urges that the Human Resources Subcommittee approve, at the very 
minimum, an incremental benefit increase as part of an SSI reform 
package. This is absolutely essential for any meaningful SSI 
reform legislation. 

B. Repeal One-Third Reduction Provision 

The SSI benefit standard should not be reduced by one-third 
when low- income aged, blind or disabled recipients live in the 
household of another for a full calendar month and receive in-kind 
maintenance and support. This provision discourages families from 
helping other needy relatives. In addition, it may cause some low- 
income elderly persons to be unnecessarily or prematurely 
institutionalized. Experts estimate that relatives represent 84 
percent of all caregivers. The one-third reduction provision 
intensifies the financial hardship for an SSI family member. By 
discouraging family support, it has the effect of encouraging 
institutionalization, which, of course, is a more expensive 
alternative to family support. 

Furthermore, SSA personnel claim that enforcement of this 
provision is a complex and time-consuming task because it requires 
collecting information and making decisions which can be very 
subjective. 

Therefore, NCBA supports the SSI Modernization Panel's 
recommendation to eliminate consideration of in-kind maintenance 
and support as income. H.R. 2676 includes a provision to implement 
this recommendation. NCBA urges adoption of this measure. 

C. Expanded Outreach 

NCBA further supports greater outreach efforts to assure that 
low-income aged African-Americans and other older Americans receive 
the benefits to which they are legally entitled. A substantial 
proportion of potentially eligible persons do not participate in 
SSI because of inadequate knowledge. 

One of the great myths in our society today is that low-income 
older Americans are protected, to a large degree, by safety net 



61 



programs, such as SSI, Medicaid, food stamps, and other programs. 
The harsh reality is that the safety net is full of holes. Many 
poor older persons simply do not receive benefits from safety net 
programs which they are entitled to receive. 

The Census Bureau's poverty report made this point very 
dramatically. Only about one out of every four (26.4 percent) poor 
persons 65 years of age or older were in households that received 
means-tested cash assistance in 1992. In other safety net programs 
for similarly situated poor older Americans, their participation 
rates were as follows: Medicaid, 33.8 percent; food stamps, 23.4 
percent; and federally-assisted housing, 15.3 percent. 

NCBA favors statutory earmarked funding authority to increase 
SSI outreach. 

D. Increase Countable Resource Limitations 

NCBA supports the recommendation of the SSI Modernization 
Project to (1) increase the countable resource limitations from 
$2,000 to $7,000 for qualifying individuals and from $3,000 to 
$10,500 for eligible couples; (2) simplify the resource test; and 
(3) simplify the exclusions. 

Congress established the original countable resource 
limitations at $1,500 for qualifying individuals and $2,250 for an 
eligible couple. Beginning in January 1985, these ceilings were 
increased by $100 a year for an individual and by $150 annually for 
a couple until the resource limitations reached $2,000 for an 
individual and $3,000 for a couple by January 1989. Congress has 
made no adjustment in the countable asset amounts since 1989. 

The current resource limitation is outdated and needs to be 
adjusted. SSI recipients and applicants should be able to have 
increased assets in order to meet emergencies (such as unexpected 
medical expenses, home repairs, and others) . H.R. 2676 would 
implement this provision. NCBA urges its adoption. 

E. Periodic Review Panel 

Former Social Security Commissioner Gwendolyn S. King took an 
historic first step when she named a panel — the SSI Modernization 
Project — to conduct a comprehensive review of SSI and to make 
appropriate recommendations to improve the program. 

Our nation has benefitted greatly from the thoughtful review 
of this important safety net program by the distinguished panel. 
NCBA believes that this detailed analysis should be an ongoing 
activity in order to assess whether SSI is performing its mission 
and to determine whether improvements are needed. A blue ribbon 
advisory panel reviews Social Security periodically and makes 
recommendations to improve and strengthen this vital program which 
touches the lives of almost every American family in one form or 
another. The ongoing review has been instrumental for Social 
Security's sound development and adaptation to changes in our 
society. 

NCBA believes a similar process is essential for SSI. 
Therefore, NCBA urges the Human Resources Subcommittee to mandate 
statutorily the periodic review of SSI at least every four years by 
a distinguished panel of private citizens. 

T. Conclusion 

In conclusion, NCBA commends the Human Resources Subcommittee 
for holding this hearing on SSI. We look forward to working with 
the Subcommittee to improve and perfect SSI. We wish to reaffirm 
again as strongly as possible that a benefit increase is an 
absolute must for any type of SSI reform or improvements. 



62 

Chairman Ford. Ms. Hardy. 

STATEMENT OF DORCAS R. HARDY, PRESIDENT, HARDY & 
ASSOCIATES, AND FORMER COMMISSIONER, SOCIAL 
SECURITY ADMINISTRATION 

Ms. Hardy. Thank you, Mr. Chairman, and Mr. Santorum for 
the opportunity to be here today. 

First, I would like to commend the thorough work of the SSI Re- 
view Panel and its chairman, Dr. Flemming. 

I heartily concur that much needs to be done to improve the SSI 
program, especially its administration. It seems to me that the 
complexity of SSI has been a nightmare for every Commissioner of 
Social Security since the program was Federalized in the early 
1970s. However, the recommendations of the panel do not totally 
address all the aspects or complexity, nor do they really, quote, "fix 
the problem"; and they just perpetuate the "cobweb," as one of your 
colleagues called it. 

Additionally, in this day of a very large Federal deficit, when 
there is a need to restrain our government's growth, it is difficult 
to agree totally with the proposed recommendations in light of 
their potential tremendous costs. 

As you well know, entitlement programs currently are about 49 
percent of the Federal budget. They are projected to rise to about 
65 percent by the mid-1990s. Federal spending on major means- 
tested programs has increased nearly fivefold since 1968, and the 
cost of the SSI program will also continue to increase. 

You have before you a recommendation for $105 million in new 
spending for the next 5 years for SSI. That would bring the pro- 
gram to about $72 billion in 1997 and would make it about the 
third or fourth largest Federal program depending on what hap- 
pens with health care. 

But there are still a lot of unanswered questions. Where would 
the revenues come from for program expansion? How would the 
program increases make the program less complex or better ad- 
dress the impoverishment of many of its clients? 

I would like to take a moment here to look at Supplemental Se- 
curity Income reform. When H.R. 1 was passed, I was serving as 
Assistant Secretary of Health in the State of California. Any Cali- 
fornian, and especially a State employee, believes that they know 
better than Washington. But when Congress said they would do all 
our work for us in administering a welfare program to the aged 
and blind, we thought that was a terrific idea, and we were very 
happy to see the program become a Federal problem. 

But, in retrospect — and this became very clear to me as Commis- 
sioner — the SSI program, I think, should be State administered. I 
appreciate that this belief probably is heresy and it is possibly — 
definitely, in many quarters without political support, and there- 
fore perhaps unlikely to occur. It certainly endangered lot of the 
discussion when it was discussed at SSA. But I honestly believe it 
would be for the best and in the best interests of the American 
public, especially the poor whom the program is supposed to serve. 

Over the years, the SSI program, as Secretary Flemming's report 
has pointed out, has been enhanced and now serves nearly 6 mil- 
lion recipients, 25 percent of whom are aged, 63 percent disabled 



63 

adults, and 12 percent children. When SSI was a State program, 
there were no children were included. 

The SSI report is very thorough. It has lots of details, and I am 
sure you will continue to debate many of the recommendations for 
a long time. But the current facts are that it pays nearly $30 bil- 
lion annually to the poor, aged, blind and disabled. The percentage 
of aged who are served continues to decline dramatically while the 
number of disabled and children increases. By 1994, the number of 
dollars paid to disabled children will exceed the dollars paid to 
aged beneficiaries. The fastest growing portion of aged are aliens 
and the fastest growing portion of the nonaged are addicts and al- 
coholics. So clearly the population served by SSI has changed dra- 
matically since its inception. I think it is appropriate to review its 
success as well as its failures and the changes that are needed as 
well. 

I would like you to look at these particular areas: 

One is aged aliens. It was never anticipated that the number of 
aged aliens would be so great. The original intent of the SSI pro- 
gram was to support American citizens, a program of last resort for 
those in poverty. Now, about 25 percent of the aged recipients are 
aliens and 85 percent of those aliens are just in seven States. That 
continues to grow. 

In the second area, disabled addicts and alcoholics, the SSI pro- 
gram has always required treatment referral for this group of bene- 
ficiaries. But it has historically been very difficult to work with 
State services to ensure that recipients receive what they need in 
terms of treatment. Without rehabilitation, just like without work 
incentives, these people will always be SSI clients. If the intent of 
the program, at least for working-age adults, is to provide a tem- 
porary safety net, then we have defeated the purpose and we just 
have a permanent, very complex, cash benefit program. 

You have begun to address the issue of SSI children, and I would 
just like to say that many parents do apply for SSI for their dis- 
abled children. It is a gateway to Medicaid programs. We should 
be looking at some other way to have those children eligible for 
Medicaid, as opposed to through the SSI program, and an SSI ben- 
efit. 

Finally, you should promote service integration. SSI is just one 
of very many means-tested programs in the government. They are 
all trying to assist people who are impoverished, but they are doing 
it piecemeal. I suggest, as you develop proposals for welfare reform, 
that you insist that SSI be included so that, for once, we will have 
a policy about the relative roles and responsibilities of governments 
and individuals for alleviating poverty. 

SSI is the most complex of any Feaeral program. SSA employees 
are the best in the Federal service, but they are not trained nor 
do I believe they should be trained to be social workers; and the 
comments in this report and from many SSA employees is that 
they are supposed to be all things to all people. I don t think that 
is appropriate. 

We need an overhaul of these programs so they are rational, so 
they are fair and comprehensible. We are supposed to be 
reinventing government, providing, quote, "service to customers" 
and I think that means more than just eliminating layers of bu- 



64 

reaucracy. There is not enough money to go around for everybody, 
as we well know. But there has got to be a way to make this a pro- 
gram that does replace despair with hope, a program that we can 
meet that challenge. There is an opportunity here for the Congress 
to relook at the entire SSI program — it has drastically changed in 
the last two decades — and to integrate who is responsible for what. 
Consider: Who should pay? Should we reconsider an annual guar- 
anteed cash benefit? Without all the rules and regulations, would 
it be less expensive in the long run? And why is SSA, a payment, 
banking and adjudication agency, trying to be all things to all peo- 
ple? 

Thank you Mr. Chairman. 

Chairman Ford. Thank you, Ms. Hardy. 

[The prepared statement follows:] 



65 



Testimony of Dorcas Hardy 

Subcommittee on Human Resources 

Hearing on Supplemental Security Income Program 

October 13, 1993 

Thank you for the opportunity to testify before the Subcommittee today 
regarding the SSI program. First, I want to commend the thorough work of the SSI 
Review Panel and its chairman, Dr. Fleming. 

I heartily concur that much needs to be done to improve the SSI program, 
especially its administration. The complexity of SSI has been a nightmare for every 
Commissioner of Social Security since the program was federalized in the early 70s. 
However, the recommendations of the panel do not totally address all the aspects of 
complexity. Additionally, in this day of bulging federal deficits and a desperate need 
for restraint of government's growth, it is difficult to agree with the proposed 
recommendations in light of their tremendous costs. 

As you know, entitlement programs already represent 49% of the federal 
budget and are projected to rise to 65% by the mid-90s. Federal spending on major 
means-tested programs in constant dollars has increased nearly 5-fold since 1968, from 
$43 billion to $208 billion. 

The costs of the SSI program also continue to increase. We have before us a 
report that recommends $105 billion over the next 5 years in new spending on the SSI 
program. This is an astounding figure. In a program that is already scheduled to 
grow from $23 billion to $33 billion without Congressional action, the SSI 
Modernization report recommends increasing SSI outlays by $39 billion in 1997. If 
followed, this recommendation would bring SSI outlays to $72 billion in 1997, making 
SSI the fourth biggest social program in the federal budget after Social Security, 



Medicare, and Medicaid. 

Yet there are still many unanswered questions: where would revenues come 
from for program expansion? How would these program increases make the program 
less complex or better address the impoverishment of many of its clients. 

When HR 1 was passed and implemented in the early 70s I was serving as 
Assistant Secretary of Health for the State of California. Any Califomian, and 
especially a state employee, believes that they know better than Washington. But 
when the Congress said they would do all our work for us in administering a welfare 
program to the aged and blind, we thought that was a great idea.. .and were happy to 
see the program become a federal problem. But, in retrospect, and this became very 
clear to me as Commissioner, the SSI program should be state administered. I 
appreciate that is probably heresy, without political support from this body and 
therefore very unlikely to occur but I honestly believe it would be in the best interest 
of the American public, especially the poor whom the program is intended to serve. 

Over the years the SSI program, as Secretary Fleming's report has pointed out, 
has been enhanced and now serves nearly 6 million recipients, 25% of whom are aged, 
63% disabled adults, and 12% children. When SSI was a state program, no children 
were included. 

The SSI report is very thorough with regard to the myriad of details of the 
program. I am confident that you will debate for many hours the recommendations, 
particularly the costs to the taxpayers of implementing those recommendations. 

But as you examine the program and probably learn more about its details than 



67 

you ever intended or needed to know, I would like to try to put some of your 
deliberations into a different perspective, not just dollars because it is certainly unclear 
how any of these recommendations would be funded, but more in light of the purpose 
of the program and the role of the federal government with regard to delivery of cash 
grants to those in our society who generally, through no fault of their own, are eligible 
and need public assistance. 
The current facts are: 

SSI pays nearly $30 billion annually to the poor, aged, blind and disabled. The 
percentage of aged who are served continues to decline dramatically while the number 
of disabled and children increases. By 1994, the dollars paid to disabled children will 
exceed the dollars paid to aged beneficiaries. Additionally, the fastest growing portion 
of aged are aliens; the fastest growing portion of non-aged are drug addicts and 
alcoholics. Clearly the population served by SSI has changed dramatically since its 
inception. And it is appropriate to review its success and failures as well as its future. 

I suggest you begin by looking at several diverse SSI populations: 
Beneficiaries: 
Aged Aliens 

It was never anticipated that the number of aged aliens would be so great. 
Original intent of the SSI program was to support American citizens ~ the program of 
last resort for those in poverty. But since 1 982, the application rate from aliens has 
tripled. About 25% of aged recipients are aliens. 85% of the aliens on the rolls are in 
7 states. I only can guess how many aged aliens have recently come to the U.S. 



68 



Disabled addicts and alcoholics: 

The SSI program has always required treatment referral for this group of 
beneficiaries but it has historically been difficult to work with state services to ensure 
that recipients secure and successfully complete treatment. Expenditures will only 
continue to increase. Without rehabilitation, these people will always be SSI clients. 
If the intent of the program, at least for working-age adults, is to provide a temporary 
safety net. We have defeated the purpose and indeed have just perpetuated a 
permanent complex cash benefit program. 

Service Integration: 

These are means tested/welfare beneficiaries that everyone is trying to assist, 
but the job is being done piecemeal. I suggest that as the Administration develops its 
welfare proposal that you insist that they include the SSI programs so perhaps, for 
once, we will have one policy about the relative roles and responsibilities of 
governments and individuals for alleviating poverty, or at least providing cash benefits 
and social services. 

The SSI program, with the exception of the Social Security program, is the 
most complex of any federal program. That makes it nearly impossible to administer, 
as the SSI panel pointed out I recall that nearly 50% of SSA's resources are used to 
address 15% of the beneficiaries, Title XVI, SSI. Though the panel certainly looked 
at some of the complex issues, most of their recommendations are expansion of what 
is currently in place, such as increasing income tests or raising benefit payments. But 



69 



the outcome of these recommendations will just be more operating instructions for the 
claims representatives. 

Social Security employees are the best in the federal service but they are not 
trained nor do I believe they should be trained to be social workers. The comments in 
this report and from many others is that SSA employees should be all things to all 
claimants. That is not appropriate. There are numerous state support and state social 
services that should be the primary vehicles for assistance. 

What needs to occur is an overhaul of all these programs so they are rationale, 
fair, and comprehensible. If "service to customers" is the new watchword in town, SSI 
has a lot of difficult customers to whom we have a responsibility to figure out how to 
serve them well, and fairly and simply and cost effectively. In turn, through these 
myriad of government programs and cash grants, beneficiaries should be empowered, 
through incentives, to move themselves, as much as possible, off the government rolls. 
(Example: 1619 a and b; work incentives for disabled SSI beneficiaries). 

This Administration has set about to reinvent government. I submit that means 
more than just eliminating layers of bureaucracy. It means your providing the 
leadership to put these myriad of programs together, to charge the career service to 
redesign programs, to work with their counterparts in the States and figure out who 
does what. There is not enough money to go around to do everything. I think it is far 
more important to get a cash grant to a needy person, hopefully for an interim period 
of time, than to have numerous monthly checking/oversight as to whom a beneficiary 
is sharing housing with or who paid for dinner last week. I appreciate that many SSDI 



70 



recipients are not able to cope.. .in the world or with government... maybe that makes 
them no different from us.. .but there must be a way to simplify this tremendously 
labor intensive and complex program that needs tremendous improvement There are 
numerous examples beyond computation of income support and maintenance or the 
inadequate representative payee program. 

There is an opportunity here for the Congress relook at SSI, a program which 
has drastically changed in the last two decades, and integrate your thinking about other 
poverty programs. Ask yourselves: Who is responsible for what? Who should pay? 
Should we reconsider an annual guaranteed cash benefit without all these rules and 
regulations? Would it/could it be less expensive in the long run? Why is SSA, a 
payment/banking/adjudication agency being asked to be all things to all people? (Last 
week they were to run the new health care plan, too!) Within a realm/environment of 
compassion for those who need your attention, mere are much larger issues here which 
I ask you to address. 



71 

Chairman Ford. Ms. Zelenske. 

STATEMENT OF ETHEL ZELENSKE, STAFF ATTORNEY, 
NATIONAL SENIOR CITIZENS LAW CENTER 

Ms. Zelenske. Thank you for the opportunity to testify this 
morning before the subcommittee. My testimony will focus on those 
who remain unserved by the SSI program and the need for in- 
creased outreach in the program. 

You have heard testimony on this panel about the increasing 
numbers of young and elderly persons living at or below the pov- 
erty rate. The data is particularly distressing for certain segments 
of the elderly population; depending on your gender, race or age, 
you are even more likely to be living in poverty. 

Clearly for many people, there are gaping holes in the safety net. 
SSI plays a vital role in providing benefits to vulnerable members 
of our society living at subsistence levels; however, the statistics 
show that those who are intended to be beneficiaries of the pro- 
gram are not receiving it. 

According to the GAO, only 28 percent of poor elderly persons 
lived in households receiving Federal means-tested cash assistance, 
which is primarily SSI. Other studies have consistently shown that 
only about 50 percent of eligible elderly persons receive SSI. This 
figure is even lower, depending again on age, gender, race, type of 
eligibility and living arrangement. 

Why is participation so Tow? Many barriers have been identified 
which prevent eligible persons from obtaining SSI. These include 
difficulty with the English language, including illiteracy, the per- 
ceived welfare stigma of SSI, distrust or fear of government bu- 
reaucracy, and physical or mental disabilities which limit the abil- 
ity to access Social Security, to understand the process, or to access 
organizations that assist with the process. 

For the elderly population, it appears that lack of information 
about SSI is a main factor. Many elderly individuals are simply un- 
familiar with the complicated but beneficial rules available to 
them. Surprisingly, there are many people who don't even know 
that SSI exists. 

What can be done to address the problem? Congress has been 
aware of the need to increase participation and has appropriated 
$27 million over the last 5 years for outreach. With these funds, 
SSA has funded over 80 projects throughout the country, focusing 
on underserved target populations. Most of these projects are local- 
ized, involving community organizations, coalitions or local govern- 
ment agencies who are trying to address the needs of the popu- 
lations they serve. 

When you review a list of the projects, you can see the creative 
and innovative thinking that is beginning to address the problem. 
But I want to stress that this is only a beginning to address the 
problem. 

There are some States that have had no demonstration projects. 
In other States there may have been a project at a single site, 
which is either rural or urban, but addresses only one small por- 
tion of the population. In other States, there has been no grant to 
a local organization. 



72 

My point here is that there are many areas of the country that 
remain untouched and many target populations remain unserved. 
Obviously, given the Census Bureau report, the need for SSI has 
not lessened as the number of poor elderly, disabled and blind per- 
sons increase. 

We recommend that the outreach program be made permanent. 
The SSI Modernization report recommended that a specific funding 
mechanism be established for outreach. 

Last month, Senator Riegle introduced legislation in the Senate 
which would accomplish this goal. S. 1451 makes permanent what 
has become an annual congressional appropriation for SSI outreach 
by providing that a very small percentage of SSA's administrative 
budget be made available on a yearly basis to fund grants to the 
local agencies and organizations. This bill has broad support among 
organizations representing persons with disabilities and persons 
who are elderly, blind and/or homeless. 

We support any efforts to introduce similar legislation in the 
House and urge its passage. 

Thank you. 

Chairman Ford. Thank you very much. 

[The prepared statement follows:] 



73 



NATIONAL SENIOR CITIZENS LAW CENTER 

1815 H STREET. N.W.. SUITE 700 
WASHINGTON, D.C. 20006 



TELEPHONE: (202) 087-5280 FACSIMILE (202) 705-6792 



WASHINGTON, D C 
BURTON D. FRETZ 
EXECUTIVE DIRECTOR 



STATEMENT OF ETHEL ZELENSKE, STAFF ATTORNEY, 

NATIONAL SENIOR CITIZENS LAW CENTER, 

BEFORE THE SUBCOMMITTEE ON HUMAN RESOURCES, 

COMMITTEE ON WAYS AND MEANS 

UNITED STATES HOUSE OF REPRESENTATIVES 

OVERSIGHT HEARING ON SUPPLEMENTAL SECURITY INCOME 

OCTOBER 14, 1993 



Thank you for the opportunity to testify before the Subcommittee today. My 
testimony will focus on the need for increased outreach in the Supplemental Security 
Income (SSI) program. 

The National Senior Citizens Law Center (NSCLC) provides national advocacy 
on behalf of poor persons with specific emphasis on representing the interest of the 
lowest income elderly people, particularly women and racial and ethnic minorities. 
NSCLC also provides support to legal services, pro bono, and seniors' advocates who 
represent elderly poor people. One of NSCLC's priority areas is increasing income 
security for low-income elderly persons, which includes the SSI program. 

The overall percentage of elderly persons, age 65 or older, living in poverty has 
declined over the past 30 years due, in great part, to federal initiatives such as Social 
Security. However, the number of elderly persons who are poor or near poor 
continues to grow, especially among certain groups who are economically vulnerable. 

Despite the increasing need for SSI, the participation rate by eligible persons in 
the SSI program remains low. A number of barriers have been identified and outreach 
is needed to increase participation. In every fiscal year since 1 990, Congress has 
earmarked funds for SSI outreach demonstration projects through the appropriations 
process. This program should be made permanent through legislation guaranteeing 
that funds are available every year for outreach activities. 

I. THE PROBLEM: THE NUMBER OF POOR ELDERLY PERSONS 

CONTINUES TO INCREASE 

After many years of a dramatic decline in the poverty rate among elderly 
persons in this country, thanks in large part to federal programs like Social Security, 
the problem appears to be on the increase. Recent Census Bureau reports indicate 
that the number of elderly persons who are poor or near poor continues to grow: over 
5.7 million elderly persons or 19% of the elderly population.' 

According to the GAO, this figure may in fact "underestimate the magnitude" of 
poverty among elderly persons. A 1 992 report by the GAO, Elderly Americans: 
Health, Housing, and Nutrition Gaps Between the Poor and Nonpoor? studies the 
size and characteristics of the poor and near poor elderly population and the extent to 
which poor elderly persons receive services from principal federal programs, including 
SSI. This report starkly portrays that certain groups of elderly Americans have not 
benefitted from the general economic improvements experienced by the elderly 
population as a whole: 



74 



► Elderly women were nearly twice as likely as elderly men to be 
poor or near poor. 

► Elderly Hispanics were twice and elderly blacks three times as likely as 
elderly whites to be poor or near poor. 

► Persons over the age of 75 were almost twice as likely as persons 
between 65 and 74 to be poor or near poor. 

► The additive effect of sex, race, and age was dramatic: More than half 
of all black women over the age of 75 were poor or near poor in 1990. 3 

The statistics in the GAO report, unfortunately, remain valid in 1 993. Just last 
week, the U.S. Census Bureau issued its report, Poverty in the United States: 1992' 
which shows that the number of poor persons age 65 or older rose by 202,000 
between 1991 and 1992. The 1992 data also indicates that the poverty rates for older 
women of color living alone or with nonrelatives remains shockingly high: nearly 58 
percent for elderly African-American women and nearly 50 percent for Hispanic elderly 
women. 

II. PARTICIPATION IN SSI BY ELIGIBLE ELDERLY PERSONS REMAINS 
LOW. 

Given the increasing number of poor elderly persons, especially among women 
and persons of color, the need for programs like SSI is increasing. Nevertheless, 
studies have consistently shown that the participation rate in SSI by eligible elderly 
persons remains low. 

In contrast to the 89 percent of poor households in which all members were 65 
or over and received Social Security benefits, only 28 percent of poor elderly persons 
lived in households receiving means-tested cash assistance, primarily SSI. 5 

Other studies indicate that only about 50 percent of elderly eligible persons 
receive SSI.* Even among the group receiving benefits, participation rates vary 
greatly depending on the type of eligibility and living arrangement: 

► About 66 percent of eligible, unmarried individuals participate. However, 
only 30 percent of eligible couples and only 1 4 percent of eligible married 
individuals with an ineligible spouse participate. 7 

► Participation is twice as great for elderly persons living independently as 
for persons living in the home of another (58% vs. 25%). 8 

► Only 48% of eligible, elderly persons receiving Social Security benefits 
participate. The lowest levels of participation were for persons with 
some earned income: only 8% of those eligible participate. 9 

Participation rates also vary by age, gender and race: 

» Participation among eligible women is lower than among eligible men 
(53% vs. 57%). 10 

► The participation rate is lower among elderly Hispanics than among all 
elderly persons (44% vs. 50%)." 

► Participation among eligible persons age 65 through 69 remains lower 
(48%) than for persons 70 to 79 (57%), but declines again for persons 
age 80 years or more (55%). 



75 



III. THE BARRIERS TO PARTICIPATION: WHY THE RATES ARE SO LOW. 

The GAO identified the lack of effective outreach efforts to enroll the eligible 
population as one of the reasons why participation rates are so low.' 2 SSA has 
compiled a long list of "barriers to filing for benefits"' 3 including: 

► Lack of correct information about the SSI program within the 
target population and organizations serving these persons. 

► Difficulty with reading and/or spelling the English language. 

► Limited exposure to traditional communications media. 

► Perceived welfare stigma of receiving SSI benefits. 

► Distrust or fear of government bureaucracy. 

»■ Lack of transportation and/or access to a telephone. 

► Homebound status due to age or infirmity.' 4 

Lack of information about the SSI program appears to be the main factor 
contributing to low participation. In contrast to the Social Security program, many 
individuals do not even know that SSI exists. Others are unaware or unfamiliar with 
the complicated, but beneficial rules regarding, for example, deeming of income from 
an ineligible spouse or how earned income is counted. As a result, they do not 
consider themselves as eligible. 

One study on elderly Hispanic Americans surveyed those with incomes near the 
poverty iine, asking for their reasons why they did not enroll in SSI. According to the 
report, the responses given were similar to those given by all elderly poor persons, 
primarily lack of information about SSI: 26 percent had never heard about the 
program.' 5 The study recommends that targeting SSI outreach efforts toward 
Hispanic communities could help to increase rates of participation and reduce rates of 
poverty.' 6 



IV. BEGINNING TO ADDRESS THE PROBLEM: THE SSI OUTREACH 
DEMONSTRATION PROGRAM 

Congress has been aware of the need to increase participation in the SSI 
program and has appropriated funds in each fiscal year since 1990 for outreach 
demonstration projects. In 1990, $3 million was appropriated for this purpose, and in 
each year since, including 1994, $6 million has been provided, for a total of $27 
million. 

Since the inception of the program, SSA has funded over 80 projects in nearly 
100 sites, following solicitation of proposals in two announcements.' 7 The grantees 
represent a wide range of backgrounds, including local government agencies, nonprofit 
organizations, and universities and colleges, engaging in innovative projects to reach 
hard to access populations. These projects have concentrated on underserved target 
populations such as urban and rural elderly persons; people with AIDS; persons who 
are homeless; minority/ethnic groups including African-Americans, Native Americans, 
Hispanics and Asians; disabled children; and severely mentally ill adults. 

In June 1993, SSA announced its third request for proposals, under which it 
expects to fund up to 40 projects, totalling more than $5 million.' 8 SSA has built on 
its experience from the first two rounds of grants and its own outreach efforts and has 
focussed on specific methodologies to be tested and priority outreach areas to reach 



76 



targeted populations. The announcement also includes detailed project standards and 
evaluation requirements. 

This initiative is a good beginning but has only scratched the surface. There 
are still some states where no demonstration project site has been located. In many 
more states, a single site in only one discrete part of the state has been chosen. 
Many states have not yet had a project awarded to a local organization. In sum, many 
geographic areas of the country and many diverse low-income populations remain 
unassisted. 



V. SOLVING THE PROBLEM: ESTABUSH PERMANENT AND SPECIFIC 
FUNDING FOR SSI OUTREACH 

There is no evidence that the need for SSI outreach has lessened. As 
discussed above, the number of elderly poor persons continues to grow while their 
participation rate in the SSI program remains low. The demonstration project program 
has shown that outreach can be successful. A permanent program is now needed to 
assure continuity and thoroughness in the outreach effort. 

The SSI Modernization Report recognized that many potentially eligible disabled 
and elderly individuals are not participating in the program and that many groups, 
including the frail elderly, have been underserved by outreach." The experts 
recommended that specific funding for outreach should be established by increasing 
the administrative budget by at least 5 percent 20 

Last month, Senator Donald Riegle (D., Ml) introduced S. 1451, the "SSI 
Outreach Act of 1993." This bill will strengthen outreach services in the SSI program. 
The purpose of the legislation was simply stated by Senator Riegle upon introduction 
of the bill: 

This legislation does not extend new benefits to anyone. It simply gives 
the Social Security Administration the tools it needs to effectively reach 
out to people who are unable to apply for assistance. 2 ' 

Highlights of S. 1451 include: 

► Makes permanent the annual Congressional appropriation for SSI outreach by 
providing that no less than .37% of SSA's administrative expenses (about $17.8 
million at current levels) shall be available on a yearly basis to fund grants. 

► Provides for a permanent grant program to local governments and nonprofit 
organizations to conduct outreach activities and services to targeted 
populations, as determined by the Secretary of HHS. 

► Establishes criteria for applicants to ensure that entities applying for grants 
demonstrate ability to provide outreach assistance. 

► Creates an Office of Outreach Coordination in SSA to coordinate outreach 
efforts in SSA field offices and to administer the outreach grant program. 

► Requires an annual evaluation of outreach activities conducted under the Act. 

► Provides special procedures relating to homeless individualsincluding expedited 
consideration of applications, assistance in filing documents for appeal, and steps 
to contact the individual before denying or suspending benefits. 

This legislation is endorsed by a broad range of organizations representing 
adults and children with disabilities, and persons who are elderly, blind, and/or 



77 



homeless. We strongly support efforts in the House to introduce similar legislation 
and urge its passage. 



1 . Elderly Americans: Health, Housing, and Nutrition Gaps Between the Poor and 
Nonpoor (GAO/PEMD-92-29, June 1992), p.2 (hereafter GAO Report). 

2. Id. 

3. GAO Report at 2. 

4. Current Population Reports, Consumer Income Series P-60-185, U.S. Dept. of 
Commerce, Economics and Statistics Adm., Bureau of the Census, Sept. 1992. 

5. GAO Report at 7, 40. 

6. RATES OF PARTICIPATION OF THE ELDERLY IN THE SUPPLEMENTAL 
SECURITY INCOME PROGRAM (Commonwealth Fund Commission on Elderly 
People Living Alone); Zedelewski & Meyer, TOWARD ENDING POVERTY AMONG 
THE ELDERLY AND DISABLED THROUGH SSI REFORM (Urban Institute Rep. 89-1 , 
1989); Sheils, Barnow. Chaurette, Constantine, ELDERLY PERSONS ELIGIBLE FOR 
AND PARTICIPATING IN THE SUPPLEMENTAL SECURITY INCOME (SSI) 
PROGRAM (U.S. Dept. of Health and Human Services, Contact No. HHS-1 00-86- 
0051, Final Report, Jan. 1990)("HHS Report"). 

7. HHS Report at IV-8. 

8. HHS Report at IV-9 to IV-10. 

9. HHS Report at IV-1 to IV-1 1 . 

10. HHS Report at IV-1 1. 

1 1 . Andrews, Poverty and Poor Health Among Elderly Hispanic Americans 
(Commonwealth Fund Commission on Elderly People Living Alone, Sept. 1 989), at 32- 
33 ("Cmwlth. Fund Comm. Report"). 

12. GAO Report at 42. 

13. 58 Fed. Reg. 34154, 34156 (June 23, 1993). 

14. For a more in-depth discussion of many of these barriers, see Gottlich and Clark, 
Fifteen Reasons Why Low-Income Elderly Clients Don't Get Public Benefits, 25 
Clearinghouse Review 1012 (Dec. 1991). 

15. Cmwlth Fund Comm. Report at 32-33. 

16. Id. at 57. 

17. 55 Fed. Reg. 13748 (April 11, 1990) and 56 Fed. Reg. 47874 (Sept. 20, 1991). 

18. 58 Fed. Reg. 34154 (June 23. 1993). 

19. SSI Modernization Project Final Report at 131. 

20. Id. at 132. 

21. 139 Cong. Rec. S1 1577 (daily ed. Sept 13, 19?" tenement of Sen. Riegle). 



78 

Chairman Ford. Mr. Simmons, what is your recommendation for 
a modest initial increase in the Supplemental Security Income ben- 
efits? We talked about budget restraints earlier, but what incre- 
mental increase might you suggest, and what do you suggest that 
we look to, to get the money from? 

Mr. Simmons. I knew someone was going to ask me that ques- 
tion, and the major thing I ask people to tell me is, for every dollar 
of increase in SSI benefit level, what is the cost? So for every dollar 
of increase in the benefit level, that is $65 million. So the big ques- 
tion is, how many $65 millions can we come up with on a reason- 
able basis? 

I am not on an appropriations committee or anything of that 
sort, and I would not be presumptuous enough to say that is the 
exact amount; but there isn't any question 

Chairman Ford. Over what period of time, and what incremental 
increases — I mean, what should we look at? 

Mr. Simmons. I would say that probably we should establish a 
target to say, 5 years from now — that we should be at 125 percent 
of poverty 5 years from now; and I would think that it could be 
staggered. And I am the first one to recognize that in this period 
of a hudget deficit now, we may have to do it on a small basis the 
first couple of years and then hope, as we come up with different 
efficiencies, forms of revenues, that we could increase that as we 
move along. 

But at a minimum, I think that we have to get started on this 
in a meaningful kind of way. 

Chairman Ford. Thank you. 

Ms. Hardy, do you have any suggestions for controlling the 
growth of SSI? You talked about the alcoholics, addicts, and aliens. 

Are there recommendations of the modernization panel that you 
support? I think Dr. Flemming, when he testified earlier, gave us 
a list of about — he prioritized the first four areas that this sub- 
committee should be looking into as it related to the recommenda- 
tions of his modernization panel. 

Do you have any recommendations that you would support — not 
any recommendations, but are there areas that you could support, 
any of the recommendations that the panel has submitted? 

Ms. Hardy. I think we concur on the work incentive discussion. 
I worked on the 1619 (a) and (b) pieces of the SSI to get disabled 
adults the opportunity to get back to work. I think that is a real 
important part of the program. 

I also believe the whole problem with regard to children that 
your 

Chairman Ford. I am sorry. 

Ms. Hardy [continuing]. Children that your colleagues pointed 
out is something that — I assume the administration will be coming 
forward to you with some suggestions. 

I am really looking at this, as I said, in a much bigger picture, 
and I am not — I am not convinced that just nibbling at the edges 
of the SSI program in terms of an increase of cash grant or de- 
creasing here or letting people have $7,000 in the bank instead of 
$2,000, are the only ways to improve the program. I don't think 
that is the way to go. I think it is time to look at all these poverty 
programs together to figure out where we are going; they have got 



79 

to be fully integrated. We can't afford to have all these little rabbit 
holes where everybody fits. I pointed to three populations, just 
three of the problems I think that are coming down the line even 
faster. 

Chairman Ford. When you said that we ought to take all of 
these — I don't know your words — all of these different programs 
and consider them together, obviously there is a welfare reform 
package that will be coming from the administration — hopefully in 
the next 2, 3, 4, whatever amount of months — and I think this sub- 
committee will look at the SSI program, as we reform or replace 
the welfare system in this country. 

But the SSI program was established in 1972, and I guess it took 
effect in 1974 for the purposes of the aged, blind and disabled of 
this country; and I am not sure that the review process — and you 
certainly served in the administration over at the Social Security 
Administration — even under your leadership, I don't know of any 
time that the review process had any significance about it or any 
substance about it. 

I certainly hear and appreciate your recommendations today, but 
when you served there, I certainly didn't see any goals for the So- 
cial Security Administration to move to review these disability 
claims in these very areas that you have testified on today before 
this subcommittee. 

Ms. Hardy. Well, that is not quite true. 

Chairman Ford. Maybe you will correct me. I am not pointing 
you. 

Ms. Hardy. The idea of returning SSI to the States was part of 
the strategic plan, in the 1980s, that we wrote, and was greatly 
discussed and debated. The concept of disability — and that is a 
whole other discussion of how all these reviews — take place, and 
frankly, things have changed substantially since I left, and I think 
you need to discuss that with the previous administration. 

I think we have an SSI program which is very, very complex. 
And I think there is no reason for all this complexity. For example, 
why does a recipient have to go to the SSA every month and de- 
clare who they had dinner with and whether or not they are living 
in the same room with somebody? This is not our business. 

And that is where I come down, that maybe we should relook at 
some kind of cash grant program that is not nearly as complex as 
SSI. Though the advocates and the interest groups probably would 
want to spend more money than I do, I believe we could agree that 
the program is still too detailed. The concept of trying to simplify 
this program is just not in this report. We aren't there yet at all. 

These complexities are beyond many people's comprehension, and 
those are the people we are trying to serve. We are making it very 
difficult for people. 

The States and local agencies and many of the organizations that 
are here are also trying to serve those people, and yet the integra- 
tion is very difficult at the national level. 

Chairman Ford. Thank you very much. 

Mr. Santorum. 

Mr. Santorum. Thank you, Mr. Chairman. Ms. Zelenske, you 
mentioned that one of the things we need to do is outreach. We 
have had all these demonstration programs. Can you provide some 



80 

information as to how these programs have worked on a dem- 
onstration basis? 

Ms. ZELENSKE. I think you would have to ask the administration 
how they have been administering. I sit on the board of one of the 
community mental health rehabilitation programs in Baltimore 
that got one of the grants, so I know about it in incidental ways. 

I know the administration is undertaking an evaluation process, 
but I think you have to get that information from them. 

Mr. Santorum. I think it is important before we commit a per- 
manent resource to outreach that it be shown to be cost effective 
and it makes sense to do it. 

Ms. Zelenske. I understand, and I agree. One thing that is in- 
cluded in the legislation are evaluation criteria and standards for 
grant applicants, to make sure that they can provide the assistance 
that is recommended in the legislation. 

Mr. Santorum. Thank you. 

Ms. Hardy, I very much would like to work with you in coming 
up with some ideas on your point of simplification, and I think I 
would agree with you tnat we don't necessarily want to spend a 
whole lot more on this program. But if what we can do is better 
serve the folks who are in this program, and do it in a more cost- 
effective and humanitarian way, then I would be very anxious to 
work with you on putting that together. 

Ms. Hardy. I certainly would be pleased to participate, Mr. 
Santorum. I also hope that any proposals that are before the com- 
mittee, welfare reform proposals, do indeed include SSI. 

Mr. Santorum. We have been working, as I mentioned earlier, 
with a welfare reform proposal. We have a couple of provisions 
dealing with SSI, but just in checking with SSI, it was not my 
recollection that we had any simplification in there; and that is 
something you have brought to my attention, and that we would 
like to work with you on. 

Thank you very much, Mr. Chairman. We have to go vote. 

Chairman Ford. Mr. Camp. 

Mr. Camp. No questions. 

Chairman Ford. Let me thank each of the panelists for appear- 
ing before the subcommittee today. I want to go ahead and call the 
next panel, but we have to go vote. 

They can be seated. Ms. Stephanie Blackwell, the president of 
Citizens Advisory Committee, the Center for Community Develop- 
ment of Prince George's County; Richard Weishaupt, the HHS 
project head of Community Legal Services, Incorporated. I would 
like for you all to come to the witness table and be seated. 

There appear to be two votes on the House floor; that is why 
there were so many bells just a few minutes ago. I would say that 
we are going — we would like for you to be seated because another 
member of the panel could come in and chair while I go over to 
vote. That is why I am trying to wait, but if not, we are going to 
recess. 

It might be 10 minutes, because there is a second vote imme- 
diately after this particular vote, 5-minute vote, so by the time I 
walk over it would probably be 10 minutes before we get back. 

The committee is going to stand in recess for 10 minutes. 

[Recess.] 



81 

Chairman Ford. The committee will come to order. You may pro- 
ceed at this time. Let me apologize for the time; it was out of my 
control really. The House of Representatives delayed that second 
vote; we just completed the vote. 

But we want to resume the hearine at this time. Pronounce your 
name correctly for me, so I won't make a mistake, Mr. Weishaupt. 

Mr. Weishaupt. Weishaupt. 

Chairman Ford. OK, you may proceed at this time. 

STATEMENT OF RICHARD P. WEISHAUPT, HHS PROJECT 
HEAD, COMMUNITY LEGAL SERVICES, INC., PHILADELPHIA, 
PA. 

Mr. Weishaupt. Thank you Mr. Chairman. My name is Richard 
Weishaupt. I am an attorney with Community Legal Services in 
Philadelphia. Community Legal Services was the law firm respon- 
sible for bringing the Zebley case through the Federal court system 
and litigated it up through the Supreme Court of the United 
States; and in fact, I argued the case before the Supreme Court. 

The Supreme Court, as you know, in February 1990, by a seven- 
to-two vote, with only Justices Rehnquist and White dissenting, 
found that Social Security had been managing the SSI program for 
children incorrectly since the very beginning of the program. 

I am happy to say, contrary to some of the negative testimony 
that you already heard here today, that the SSI program for chil- 
dren is back on track, that it is basically functioning well and that 
most of the criticisms of the program are based on misapprehen- 
sion of how the program works and the kind of rumor-mongering 
that is just not very helpful in terms of discussing social programs. 

First of all, I would like to start by addressing the issue of the 
number of children who are on SSI. That number has increased 
greatly within the last year, but that is not an increase that is ex- 
pected to persist. It its largely due to the fact that there was this 
one-time bubble of children who had to have their cases looked at 
again, because they had been misjudged under the old system. 

There are 452 thousand children who were denied SSI benefits 
from the period 1980 to 1990; roughly a half a million kids, and 
all of those were misjudged using the old, overly strict standard 
that was in place before the Supreme Court acted. All of those chil- 
dren were sent a letter at their last known address, and through 
some extraordinary efforts by Social Security, by our office, and by 
colleagues in the Children's SSI campaign, we succeeded, so far, in 
finding about 70 percent of those children. 

Of that 70 percent of a half million kids — approximately 
350,000 — who asked for review, 47.7 percent have been awarded 
benefits, many of them with cases that you wonder how in the 
world they could have been initially denied in the first place— chil- 
dren with AIDS, children with cerebral palsy, children with re- 
peated episodes of sickle cell anemia and repeated crises, all denied 
under the old system. 

The old system, as you probably know, used 57 conditions and 
you had to meet 1 of those 57 conditions. If your child had a rare 
disorder, if a child had a disorder that caused debilitating pain, if 
the child had a combination of impairments or had other subjective 



82 

complaints that weren't adequately captured by the former pigeon- 
hole approach, they were denied. 

And it was in response to — to that mismanagement that a rather 
conservative Supreme Court said this is not the way to run the SSI 
program, this is not the way that Congress intended. Congress in- 
tended tnat we take a look at each child as an individual and that 
we give those kids disability benefits if they have an impairment 
of comparable severity; that is, that which would disable a adult. 
A child still must meet the rather strict test for disability that 
adults are required to meet. 

As I said before, about 120,000 to 150,000 children from the 
Zebley class have been put on. There are probably some more chil- 
dren left to be adjudicated. Once that is over, however, we are 
going to return to a situation where you see relatively normal 
growth. 

There have also been some other factors that have contributed to 
the SSI children's program growth that are all commendable. One 
is that Congress mandated outreach specifically aimed at children. 
A second is that the publicity generated by the Supreme Court de- 
cision also increased awareness of the program. 

Another positive factor was the efforts of private foundations to 
do SSI outreach, and they have done a very effective job. 

And last, the Social Security Administration took away a glitch 
that penalized working parents. (See 57 Fed. Reg. 48,559 (October 
27, 1992) amending the deeming formula.) Children of these work- 
ing parents are now receiving SSI, albeit a small amount of cash 
benefit, and of course, at least in the majority of States — Medicaid. 

While Medicaid is helpful, there are also nonmedical expenses 
that any parent of a disabled child can tell you about — and I am 
sure Ms. Blackwell will be talking about them in a minute. It does 
cost more to raise a disabled child. Depending upon the disability, 
there are trips to the doctor; there are trips to therapists; there is 
special equipment that is needed. If a child is incontinent, they 
may need special products for that. The child may need special 
diet. 

Many Medicaid programs have artificial limits on physical ther- 
apy or occupational therapy or psychotherapy or on medication, all 
of which needs to be paid for. And people living below the poverty 
line simply don't have the kind of income necessary to defray those 
kinds of expenses. 

We get calls daily from parents of disabled children. We run an 
800 number to assist parents. We get calls daily from people who 
tell us what they have done with their SSI. Things like build an 
indoor bathroom so they don't have to carry a child in a wheelchair 
out to the outhouse or move into a first floor apartment so a child 
in wheelchair can have direct access to the street. 

It is those kinds of things that the people are using the SSI pro- 
gram for, that are totally worth their while and totally appropriate. 

We hear rumors that children are being coached. I would like to 
say iust a few things about that because I know my time is almost 
up. The allegation is that children are being coached to misbehave, 
but I personally have never seen such a case. 

Somewhere in the United States, I suppose it is conceivably pos- 
sible, but the people who are raising these rumors don't fully un- 



83 

derstand the SSI program. In order to qualify for SSI, you need a 
physical or mental impairment that is documented by a physician, 
a psychologist or other health care professional. It is not enough for 
the parent to come in and say, "There is something wrong with 
Johnny, why don't you give him SSI?" It requires a great deal of 
medical evidence in order to establish disability. 

Once Social Security has collected that data, they then apply a 
decisionmaking tool called the sequential evaluation process, where 
they first say, does this child have a severe impairment or is it just 
some mild impairment that really doesn't merit further attention? 
That weeds out 10 percent of the cases. 

Then they fully develop what the child can do and not do. They 
talk to his teachers. They talk to counselors in the school, they talk 
to physical therapists, they talk to any hospital or doctor that that 
child may have been to and they get a full and complete picture 
of that child. 

I would dare say if any health care professional or teacher flat 
out said, this child is not disabled, the likelihood that that child 
would get benefits would be almost zero. 

Admittedly there is some strain on teachers having to fill out 
these reports and perhaps Social Security could figure out a way 
to make it easier for teachers to respond to the additional paper- 
work that comes up, but it is simply not the case that children are 
waltzing into SSI offices, saying they are disabled, putting some 
gum in their hair and qualifying for huge amounts of SSI. That 
simply is not the way cases are evaluated and that is not the way 
that the program is being run. 

Social Security is monitoring this program very carefully. If any- 
thing, we have oeen prodding them to be more flexible in the way 
they adjudicate these cases. SSA internal quality control statistics 
show that the error rate on proposed allowances is very low. 

I would conclude by saying that the — three-quarters of a million 
children who are on this program desperately need this program. 
They need the health care. They need the cash benefits. They are 
a very small part of the population and it is probably easy and po- 
litically expedient to beat up on them, but they need friends and 
they need advocates. I thank you for your attention. 

Chairman Ford. Thank you very much. 

[The prepared statement and subsequent submission follows:] 



84 



TESTIMONY OF RICHARD P. WEISHAUPT 
COMMUNITY LEGAL SERVICES 

Thank you Mr. Chairman and members of this subcommittee. My name is Richard 
Weishaupt and I'm a lawyer with Community Legal Services in Philadelphia. Our office 
brought the Zeblev case that put the children's SSI program back on the right track; in fact, 
I personally argued the case in the Supreme Court on behalf of Brian Zebley, Joseph Love and 
Evelyn Raushi and the 452,000 children who were turned down for SSI in the 10 years before 
the Supreme Court decision argument in February 1990. I am here today to tell you that 
implementation of the Supreme Court's decision is well under way and that the revamped 
children's disability program is a great success. We are proud of the role we have played in 
remaking this worthy program. 

Since the Supreme Court's 7-2 decision our office has been deeply immersed in the 
operation of the SSI childhood disability program. We maintain and staff a toll free "800" 
number to answer questions from parents and others who have questions about the childhood 
SSI program or their cases in particular. We monitor all SSA policy and interpretations 
relating to the Zeblev case. We also participate in the Children's SSI Campaign, along with 
the Bazelon Center for Mental Health Law, the San Francisco Youth Law Center and Rural 
Legal Services of Tennessee. The purpose of the privately funded campaign 1 is to publicize 
the changed in the program and encourage families to apply. We are proud that our joint 
efforts have played a part in increasing new childhood SSI applications to unprecedented 
levels. Currently, there are 720,458 children receiving SSI benefits. We estimate that the 
program is still not reaching 50% of the eligible children, although considerable progress has 
been made. 

I would estimate that through our hotline and outreach activities we have been in 
contact with over 10,000 children and families alleging disabilities. Many of these children 
were unjustly turned down for SSI benefits (and the accompanying Medicaid) and are only now 
having their cases properly decided. Tragically, several thousand have died before they have 
had the opportunity to have their cases readjudicated. Ironically the impairments that led to 
their death were deemed not sufficiently severe to justify an award of SSI. 

The Supreme Court in Zeblev found that the Social Security Administration (SSA) had 
failed to adopt an appropriate test for evaluating disability for children. As the Supreme Court 
explained, that statute says that SSI benefits should be provided to children with 

"any impairment of 'comparable severity' to an impairment that would make an 

adult 'unable to engage in any substantial gainful activity.'" 

110 S. Ct. 885 897 (1990), quoting 42 U.S.C. §1382c(a)(3)(4). Instead of evaluating children 
the same way as adults, that is, by looking at each applicant as an individual and assessing the 
effect of that person's impairment on their overall ability to function, children were evaluated 
by comparing their conditions to a list of 57 disabling conditions. For many children with 
serious and even life threatening conditions, this pigeon hole approach was grossly inadequate. 
Children with rare disorders or newly diagnosed disorders such as AIDS; children with 
debilitating pain and other "subjective complaints" as is frequently the case with sickle cell 
patients, and children with atypical symptoms or combinations of impairments were frequently 
denied benefit as the Supreme Court noted. Even such relatively straightforward conditions 
such as spina bifida, Tourette syndrome, Down syndrome, muscular dystrophy and cystic 
fibrosis were difficult to properly analyze. 

Children with mental disorder were particularly disadvantaged under the old approach. 
Not only were they harmed by the lack of an individualized functional assessment but they 
were also harmed by listings that omitted generally accepted conditions like attention deficit 
disorder (ADD)/hyperactivity and did not even reflect standard psychiatric nomenclature for 
the diagnosis and assessment of mental impairments in children. Even before the Supreme 
Court decision, SSA conceded as much, publishing long delayed Mental Impairment listings 
and releasing a study that showed that SSA was misadjudicating mental health cases more 



1 The Campaign is funded by the Robert Wood Johnson 
Foundation, The Nathan Cummings Foundation, The Annie E. Casey 
Foundation and the Pew Charitable Trusts. 



85 



often than any other kind of case. Indeed it is little wonder that former Commissioner 
Gwendolyn King spoke publicly of the Zeblev case as one that she was pleased to have lost 

When the Court's decision was read in February of 1990, the Social Security 
Administration was already embarked on proposing new listings for the evaluation of mental 
disorders. 54 Fed. Reg. 33240 (August 14, 1989). These listings came out five years after the 
Congressional deadline for the rewriting of the listings for adult mental disorders. The delay 
was largely due to the controversy surrounding including recognized* conditions such as ADD 
and other behavior disorders as part of the listings. Eventually the Administration adopted new 
standards with almost universal approval. Already, however, the seeds of controversy had been 
planted by those who would like to label disturbed children as "bad." 

Reform of the children's program began in earnest in 1991 with the publication of the 
new Zeblev regulations that were specifically drafted to meet the requirements of the Supreme 
Court's decision and to afford children and "individualized functional assessment" (IF A) for 
the first time. 56 Fed. Reg. 5333 (February 11, 1991). Prior to this time, the children's 
program was seen as an afterthought to the SSI program. Only 5% of all SSI recipients were 
children and virtually no attention had been paid to the criteria for evaluating disability for 
children since the program's inception in 1974. Many of the listings of impairments dated 
back to the beginning of the program and SSA didn't even have a separate bureau for 
children's disability policy. 

The combination of the attention brought to bear on the program by the Supreme Court 
decision, the activities undertaken to find 452,000 class members the efforts of the Children's 
SSI Campaign and CongressionaJly mandated SSI outreach have all played a part in expanding 
the program. Thus far, over 320,000 class members have been located and had their cases 
reviewed. Of that group, over 127,000 (47%) children have been awarded SSI as a result of 
this Zeblev review. The total number of children receiving SSI increased from 438,853 in 
1991 to over 720,000. The increase includes all sorts of children including children suffering 
from mental illness and retardation (the most prevalent disabilities), cystic fibrosis, sickle cell 
anemia, AIDS, and cerebral palsy. Many of these children were so disabled that it is difficult 
to imagine how they could have been denied under any rational system. Here are just two 
examples. 

A.W. is a fourteen year old resident of Dyersburg, Tennessee. Adam was sixteen 
months old when he spiked a 106 degree fever and had to be transported to Lebonheur 
Hospital in Memphis by helicopter. His parent applied for SSI in February 1980, but were 
denied. A.W. took seizure medication until age five. He experience frequent periods of 
inattention in school, and IQ testing revealed serious problems with cognitive functioning, 
which a psychologist attributed to post-ictal dementia. In September 1993 A.W. was finally 
granted SSI. 

A.F. is a twenty-four year old resident of Philadelphia who has suffered from cerebral 
palsy since birth An SSI application was filed for him in September 1979 by his parents (now 
deceased), but was denied. Following his father's death, he reapplied for SSI and Social 
Security disabled child's insurance benefits in 1988. Although he was denied by the 
Pennsylvania state agency initially and on reconsideration, A.F. persisted with an appeal to an 
Administrative Law Judge who issued a favorable decision in August 1989, finding that he had 
major motor dysfunction involving both legs as well as mental retardation. A.F. requested 
Zeblev review of his 1979 denial, and his claim was denied again. Only after A.F. requested 
reconsideration did he receive a favorable decision which will result in his receiving retroactive 
benefits for the period 1979-88. 

Our experience with Zeblev families is that they are enormously grateful and relieved; 
many had given up any hope of getting any help for their children. They, in turn, have shared 
their enthusiasm with other parents with similarly situated children and with supportive social 
workers, who in turn have referred other people to the program. As a result, there has been 
a considerable growth in the program in the last year or two, as many clearly disabled children 
have become eligible for benefits. (This growth was not anticipated. In the initial Zeblev 



86 



rulemaking in February 1991, the Administration estimated that applying the correct rules 
would result in an additional 214,000 children being found eligible over a five year period 
(1991-96), 56 Fed. Reg. 5550. 

Needless to say, we have been carefully monitoring SSA's implementation of our 
victory in the Supreme Court. We have pressured SSA to put out final rules, which they have 
just done. 58 Fed. Reg. 47,531 (September 9, 1993). We have also carefully studied 
implementation of the new rules. If anything, SSA has been conservative in its 
implementation, tilting toward denials in many borderline cases. Erroneous denials have, at 
times, been as high as 20% in some states, leading SSA to take corrective measures at our 
urging. Some states have continued to be remarkably strict in awarding benefits. While SSA 
officials have taken steps to correct overly restrictive state interpretations, it is by no means 
easy to qualify for children's SSI. The national allowance is barely better than 50%, even 
given the backlog of clearly deserving children. We continue to get calls from all over the 
country from distraught parents who cannot believe that their children have been denied aid. 
Many of these children should be getting benefits. 

Despite this we do hear occasional complaints from a few members of the public. 
Much of it has to do with the mental health issues that I already alluded to that pre-date 
Zeblev . A few educators call us, outraged that parents have even a pplied for benefits and that 
they have been asked to fill out a two page questionnaire. A few of these cases are borderline 
~ but almost all these are cases that will be denied. Many more are cases where the educator 
does not have the whole picture. SSA regulations attach great weight to the opinion of school 
personnel, especially psychologists with direct knowledge of the child applicant. An opinion 
of a school psychologist that a child is not disabled is almost always controlling, unless 
countered by a psychiatrist, psychologist or pediatrician who persuasively argues for a finding 
of disability. 

Many advocates find that educators are unduly conservative in evaluating children, 
especially since school district are required to provide costly individualized educational 
placements for such children. That financial incentive, plus the normal inclination to see 
children as capable of learning and overcoming substantial impairments makes for an 
understandable, if misguided, bias. Our experience has shown that SSI often makes a 
tremendous difference in a family, allowing the disabled child to obtain services, or purchase 
equipment he or she needs, or even get to needed medical care. 

Here are two more examples: 

Jane Doe is an eleven year old girl with sickle cell anemia. She had her first crisis at 
six months, and experienced more than twenty episodes in the next three years, with several 
hospitalizations and numerous outpatient visits. Jane was a very bright child who attended pre- 
school in South Memphis, and often hid her symptoms from her mother and teachers so that 
she could attend; on several occasion she had to be carried out of her classroom. Her mother 
lost several laborer jobs when she had to stay home with her daughter or take her for 
emergency treatment, initially and on reconsideration by the Tennessee state agency. 
Eventually she was awarded benefits in 1986. The SSI benefits have provided the resources 
which allow Jane's mother to work part-time. 

J.P. is a sixteen year old resident of Southern Oklahoma who has been diagnosed with 
a psychotic disorder, an affective disorder, a personality disorder, and a learning disability. His 
parents applied for SSI in November 1987, but were denied. As a result of Zeblev review, J.P. 
was found disabled by the Oklahoma state agency, but only as of February 1992. J.P. suffers 
from auditory hallucinations, has seriously injured at least one other child, and was recently 
hospitalizated after attacking his father. Despite this evidence, an Administrative Law Judge 
has not only refused to find disability as of 1987, but has reversed the state agency decision 
that J.P. is currently disabled. In an attempt to stop the Social Security Administration from 
termination J.P.'s SSI benefits, his attorney has filed an emergency appeal which is pending 
with the Appeals Council. 



87 



If anything, our experience shows that the vast majority of American parents want what 
is best for their children, and only turn to SSI as a last resort, often waiting too long to make 
application. Indeed, we estimate that less than one half of all eligible children are receiving 
SSI. 

We have several suggestions for improving the children's SSI program, based on our 
experience: 

1. Improve Quality of Decision Making : encourage states to have pediatric 
specialists available to disability adjudicators and encourage states to have specialization among 
adjudicators. Children's claims still represent a very small proportion of disability claims. 
Many adjudicators are unfamiliar with children's cases and the special issues they present 

2. Increase Staffing : Both the Zeblev class and the ongoing increase in applications 
from children has put a tremendous burden on an already backlogged system. We are greatly 
concerned that decisional quality will decline as pressures for quick decisions mount 

3. Modernize the Listings of Impairments : SSA needs to revamp all its children's 
listings. Although the listings are no longer the endpoint of children's cases, most awards are 
still made on the listings. Using up-to-date standards will help make the program more 
efficient by quickly identifying the easiest cases. Most of the children's listings are scheduled 
to expire in 1993. Despite their impending expiration on December 6, there seems to be little 
activity to make timely revisions. Historically Congressional pressure has been key in getting 
revisions made. 

4. Revise rules for children who die while their rlaims are pending : Currently only 
parents of children who die before turning 1 8 can get any benefits. SSA is contemplating 
changing this rule slightly, to allow for benefits to be paid for children who die after 1 8, but 
only for their time before they turned 18. This has worked a grave injustice in the Zeblev 
case. 

5. Encourage recipient savings: Current policy encourages people to spend money 
quickly, which is a particular problem in the Zeblev case, involving children who need to save 
for the future and relatively large sums of money. We suggest expanding the "grace period" 
for larger sums of money and allowing families to set up special accounts, without the need 
to trusts, which are cumbersome and often difficult to establish. One way to do this would be 
to lift the 4 year limit of Plans for Achieving Self Support (PASS) and better publicizing their 
availability. Children shouldn't need a lawyer to qualify for SSI. 

6. Build on the already sound work incentives that "make work pay" for SSI 
recipients and their families: The SSI program already has generous work incentive programs 
that reward recipients for working, by allowing them to keep part of their check, by allowing 
recipient to requalify if they lose their job and by protecting Medicaid status. This could be 
further strengthened for teens and young adults just entering the work force by allowing 
deduction for special expenses. 

Similarly, parents of SSI kids should be afforded deductions for special work 
expenses they incur including special child care. Even without these improvements, parents 
of SSI children can earn their way out of poverty, a feature that is underappreciated in the SSI 
program by the general public and should be better publicized by SSA. Working parent should 
also be afforded Medicaid continuation. 



88 




1324 LOCUST STREET 
PHILADELPHIA, PA 19107-5697 
215-893-5300 
FAX 215-893-5350 



October 20, 1993 



Ms . Harriet Lawlor 
Committee on Ways and Means 
Subcommittee on Human Resources 
B-317 Rayburn H.O.B. 
Washington, DC 20515 



RE: SSI Hearing of October 14, 1993 



Dear Harriet 



Enclosed please find an addendum to the testimony of Richard 
Weishaupt, Esquire, Zeblev co-counsel of our office, to make part 
of the official hearing record. Chuck Jones, Director of the 
Michigan DDS,sent us the document entitled, "The National Council 
of Disability Determination Director's Positive Anectdotes About 
Childrens' SSI." These show the success and value of SSI benefits 
for disabled children. 

Thank you for your cooperation. 




■JATHAN M. STEIN 
il Counsel 



JMS/cjt 
Enclosures 

cc : Richard Hobbie (w/encl.) 



89 



The National Council of Disability Determination Director's 
Positive Anecdotes About Children*' SSI 



The following is a brief collection of some of the positive anecdotal 
examples provided to us from agencies across the United States. These 
examples represent the strong impact this program has had on the lives 
of many individuals, and their families, acros6 the country. 



A thirteen year old boy was diagnosed as having chloracne, a severe skin 
condition, as well as the bone disease spina bifida. The chloracne had 
caused the boy great pain and embarrassment due to his entire body and 
face being covered with severe acne and lesions. Fortunately, after 
going through a lengthy appeals process, the boy was awarded the SSI 
benefits and his family, of meager income, was able to provide the 
specialists that their son so desperately needed. Another case is of 
a three year old girl who suffers from asthma and multiple allergies. 
The girl is frequently hospitalized for her illnesses including asthma 
attacks, pneumonia, chronic colds and infections. She takes high doses 
of medication, eats a restricted diet and uses a breathing machine 
daily. Her mother states 'that a huge financial burden was lifted when 
her daughter was awarded SSI benefits. 



•I am writing to you to express the relief my family feels due to our 
handicapped childrens recent approval for Supplemental Security Income.. 
Two of our three children have a rare genetic disorder.. The SSI has 
allowed us to buy a booster chair (specially designed) for our 20 month 
old son., and a new car seat", '..family outings were near impossible 
before we purchased a backpack carrier and jog stroller that allows us 
to take trips". "Our older child., is easily frustrated and fears 
losing control, resulting in severe emotional problems. Two major 
purchases we have made are adapted clothing and the foods she needs for 
her low-fat diet.. She cannot do any fasteners with the exception of 
velcro. . her new clothes will make her more independent". "We have 
also purchased learning toys and games that teach cooperation, following 
rules and instructions, and fine and gross motor skills that she 
currently lacks. We also are experimenting with video and computer 
technology to help her with letter recognition, spelling and eventually 
reading. Before we applied for SSI, we filed for bankruptcy due to the 
costs of caring for our children. Now we can provide them with the 
basic specialized care and adapted devices they need" . 



90 



An 80 year old grandmother is raising six children, most on disability 
benefits for severe emotional and mental disabilities. "(The children) 
know because of SSI, their 80 year old grandmother was able to take them 
shopping this week for new school clothes for the first time". "Before 
the SSI checks, she, a widow, supported the six children on her monthly 
Social Security check, plus welfare benefits and food stamps. She's been 
taking care of them since her two daughters died in the 1980s. with 
SSI, the family's welfare grant and food stamps have been cut, but they 
still come out ahead by about $240 a month - enough for a few luxuries". 



Occasionally, a state agency or hospital using Medicaid funds will 
comment that a child has received health care or services as a result of 
a favorable disability decision. 



A treating physician called our office to thank us for follow-through on 
our disability investigation of a child's seizure activity. Through our 
contacts the physician became aware of a change in the child's seizures. 
Thus the treatment was modified to bring them to control. 



A beneficiary indicated on the reporting forms that through the use of 
SSI funds awarded when he was a child, he was able to stay in school. He 
felt without those funds he would have still been "on the streets" and 
unable to work. 



A mother wrote our office to say due to the disability investigation, 
she was able to identify that her child had a developmental delay and 
then got him involved in an Early Childhood program. 



A Rehabilitation Counselor reported that a beneficiary had used SSI 
funds to find an apartment. Without the apartment the rehabilitation 
facility would not have accepted the beneficiary into the appropriate 
treatment program. When he had been allowed, he was living on the 
streets, had not been in school for over a year, and had never worked; 
a child claim at time of allowance. 



A parent reported they could not afford the child's medication. While 
reviewing an issue of prescribed medical treatment, we did a presumptive 
disability decision, which allowed the parent to get the appropriate 
medication. 



91 



We've had calls from hospital social workers, in which they will be 
holding for surgery scheduling based on our disability determination. 



We have had multiple reports of children Cor which we did special 
testing for a disability application, when the parent and/or treating 
source would not have done it due to cost. The treating source was 
subsequently able to use the special testing to better refer the child 
for appropriate treatment /testing. 



Our pediatric medical consultant has frequently commented that parents 
are frequently overwhelmed by the medical bills for traumatic birth 
impairments. The neo-natal outreach program and multiple-body system 
disability decisions have been a (quality of) life saver for these 
families . 



Social Workers tell story after story about how parents have to change 
job status when the child comes home from the hospital. Most expect to 
continue working, but with an ill newborn, they have to change plans and 
stay home. The loss of income in many cases is partially replaced by 
SSI. This is a stressful: time for new families. The financial and 
medical help from SSI is part of the reason some families stay together 
despite the stress. 



An eight year old child in Milwaukee received SSI after Zebley review 
found her medically eligible back to initial application at 12 months. 
The extra money allowed for a purchase of a van to assist in her 
transport to programs that will help her maintain/regain improved self 
care functioning. 



A young teen with spina bifida was found eligible after Zebley review, 
and the family was able to remodel their home to make him more 
independent . 



SSIDC eligibility was obtained for a girl after a head injury and 
seizures, allowing her to access pediatric specialty care that they 
previously were unable to afford. 



92 



A LaCrosse family could not afford to make several changes to the 
bathroom, etc. for their son with cerebral palsy, but were able to with 
Zebley settlement. 



A four year old with facial deformity became suicidal. Expertise was not 
available locally. SSIDC/MA allowed family to take her to a child 
psychiatrist and she is doing very well now, four years later. 



A family was able to purchase an air conditioner for a neurologically 
impaired child with SSI monthly payment. (No other program reliably pays 
for items such as air conditioners.) 



An eight year old Native American girl with cerebral palsy was able to 
receive a power wheelchair enabling her to increase her independence. 
SSIDC also provided funds for expert rehabilitation services. 



A family with a son with achondroplasia and hearing impairment obtained 
specialized care for his special needs. 



A premature infant with multiple congenital anomalies had the lengthy 
hospitalization funded, as well as care at home for a gastric tube, 
oxygen administration, and special medical services. 



A child with a severe seizure disorder became depressed and displayed 
many behavioral problems. The family had incurred thousands of dollars 
of outstanding bills for outpatient counseling which was paid for when 
the child became eligible for SSI. 



A family with three children affected by a genetic bone-joint disease 
have been helped by their SSI/DC to travel from far northern Wisconsin 
to Milwaukee. With the assistance they can pay for travel expenses and 
the specialty care. 



CAJ: pjs Compiled (9/93) 



I 

93 

Chairman Ford. Ms. Blackwell. 

STATEMENT OF STEPHANIE BLACKWELL, PRESIDENT, CITI- 
ZENS ADVISORY COMMITTEE— SSI APPEAL TO CONSCIENCE, 
ON BEHALF OF CENTER FOR COMMUNITY DEVELOPMENT 
OF PRINCE GEORGE'S COUNTY, INC. 

Ms. Blackwell. Yes, Congressman Ford and members of the 
committee, thank you for inviting me here today on your congres- 
sional oversight hearing for SSI. 

My name is Stephanie Blackwell and I live in Langley Park, Md., 
and I am also the president of the Citizens Advisory Committee — 
SSI Appeal to Conscience in Maryland. I am a mother of three, one 
of whom receives SSI. His disability is ADHD, attention deficit hy- 
peractive disorder and autistic-like behavior which is associated 
with autism. This means that my son, 6-year-old Terrence, is way 
below average in writing, social skills, motor and speech develop- 
ment. On the other hand, he is very high functioning in other aca- 
demic skills. These are his strengths and his weakness with which 
we are working to improve his development. 

I also have two daughters: Angelia, age 6, and Constance, age 4. 
I applied for SSI for my daughter Angelia who has speech and lan- 
guage disabilities over 2 years ago and have been turned down 
twice because she didn't meet eligibility requirements." But last 
week under reconsideration because of the Zebley case, she is to be 
evaluated again. I have also applied for SSI for Constance who has 
chronic asthma and speech delay. I am still waiting for an answer. 

I am in favor of the recommendations for increasing SSI to 120 
percent above the poverty level. As a single parent of three, I live 
on $800 a month and $296 in food stamps. My rent is $660. After 
I pay my rent, I only have $140 to buy clothing, school supplies, 
transportation, additional food, cleaning materials, phone, utilities 
and tutoring service for my son. 

The tutoring for Terrence provides additional activities for him 
which are very important for autistic child development and gives 
him learning to socialize in a more normal way. 

I am also in favor for the reform which automatically gives a 
medical card with SSI benefits. When Terry was to receive SSI, his 
medical benefits from AFDC were canceled. However, his medical 
benefits under SSI was delayed 15 months. It was very painful and 
unfair to require a sick child to wait over a year for help which he 
was already qualified to receive. While waiting to receive a medical 
card for Terry, I made many phone calls, and visits to a social serv- 
ice and several calls to the SSI to get some action. Finally, through 
the Department of Human Resources, I received his medical card 
15 months after they were prematurely canceled. 

On behalf of my children, and many other needy children, I am 
in favor of limiting the waiting period to 90 days for determining 
SSI benefits. If determination cannot be made, SSI benefits should 
begin. If later the claim is denied, there should be no repayment 
of penalties from the applicant. The stress of survival over long pe- 
riods is very damaging, not only to the SSI person, but to the fam- 
ily in which the person lives. You can't imagine the stress and de- 
pression. 



94 

I am also in favor of a permanent outreach to the public. The 
outreach should start with Social Services, extended through the 
special public school educational centers. At these center schools, 
there are so many families who receive AFDC and have children 
with disabilities who are never made aware that they can apply for 
SSI. 

Thank you very much for allowing me to testify before you today 
because many children and adults with life threatening disabilities 
will not survive without the reforms that are proposed. These re- 
forms also provide the foundation so that many of them will be- 
come self-supporting members of society and not adult burdens. 

I have one more thing to say. I mentioned the tutoring services 
for my son. Right now my son has been suspended from school be- 
cause of behavior — because of his disability. He is home with no 
services. It is distressing for disabled children and parents to go 
through withdrawal of services when they are most critically 
needed. 

I cannot begin to say how much these changes need to be made 
to help parents like me who have disabled children. 

Chairman Ford. Thank you, Ms. Blackwell. 

Mr. Weishaupt, you have heard one of my colleagues testify ear- 
lier today in the area of SSI benefits and some of the horror stories 
that have been said. Much concern has been expressed by edu- 
cators, as well as others, that the SSI program may actually be 
hindering children because of them becoming eligible or just not to 
be determined ineligible once they are accepted into the SSI pro- 
gram. 

Let me ask you, is there a better way? We have discussed this 
earlier with a couple other witnesses, but is there a better way to 
respond to this need other than cash assistance for the children on 
SSI to address the illness or whatever deficiencies that they might 
be suffering with? 

Is there a better way other than just the cash assistance? 

Mr. Weishaupt. Well, ideally you would take each family and 
you would look at what they need. The problem is that frequently 
what you would find would not be cheaper than what we now have. 

I mean, many of these children have even more needs than the 
SSI check can possibly pay for. 

Chairman Ford. Given 

Mr. Weishaupt. They are living in abject poverty. We do have 
some thoughts about how we could make it work better, and I 
would like to get into that in a second. 

Chairman Ford. The question is whether cash assistance versus 
addressing the disabilities that they might suffer with 

Mr. Weishaupt. I think the casn assistance is an essential part 
of the entire package, and I would also point out that in at least 
12 States that are so-called 209(b) States, those children don't 
automatically qualify for Medicaid, and in those States, all they get 
is that cash. 

And in the State of Wisconsin, I would also point out that SSI 
was cashed out. Wisconsin cashed out food stamps, so that an SSI 
child is not eligible for food stamps. 

There are some things that could certainly be improved upon— 
the program, like any program, could be improved, and certainly if 



95 

there are isolated cases where parents are not getting appropriate 
treatment for their child, I think that anybody who knows about 
that has an obligation to report that to the Social Security Admin- 
istration. They take those kinds of allegations very seriously. 

What SSA tells us, though, is that nobody makes those allega- 
tions, and we hear story after story about people who don't want 
their kids to get better or that are abusing their children, but then 
when we ask, well, if a child is being sexually and physically 
abused, why isn't that parent being reported to the child welfare 
agency, or if they are not being taken for medical treatment, why 
aren't they being reported to Social Security so that Social Security 
can step in and either threaten to cut off Benefits, which they can 
do if treatment is refused, or to name someone else to manage the 
funds if the question is one of fund mismanagement. 

Both those mechanisms exist. Perhaps they need to be better 
communicated to the entire community that services disabled chil- 
dren, but those mechanisms are there, and I have seen cases where 
they have been used to deal with isolated instances of inappropri- 
ate behavior by parents. 

In addition, things could be done to encourage parents, as we 
said, to work. One of the things that SSI does help poor families 
do is pay for extra daycare so that a parent can go to work. 

I have an autistic nephew. He can't be left with the girl down 
the street. He has to be cared for by a trained professional. Fortu- 
nately his parents are upper middle class and they can afford the 
huge amounts of money it costs to watch him while they go to 
work. He has programs. He had school. He is in a day program, 
but there are other times, as you know, work isn't always 9 to 5 
and employers expect you to be there and they expect someone — 
they expect you not to bring your personal problems to work. 

There are ways that we could make it easier for parents of dis- 
abled children to work by giving them deductions in the deeming 
formula for special child care. Those kinds of things are certainly 
reasonable and we would applaud any efforts to modernize the SSI 
program in that respect. 

We also agree with one of your colleagues who suggested the no- 
tion of prepackaged trusts to allow parents to put aside money for 
a child's education and special needs, without running afoul of the 
resource limit. A lot of parents of Zebley class members have re- 
ceived large amounts of money for benefits they were entitled to. 
Thev run up against the fact that the SSI program has a statu- 
torily enacted rule that says that a family cannot have more than 
$2,000 in cash resources. They can't put the money away for the 
child for higher education or schooling beyond 18. There should be 
a simple way, without getting lawyers involved and without having 
to draft up fancy trusts, to put the money in an earmarked ac- 
count, I think that that is something that we could achieve consen- 
sus on fairly quickly. 

These children, many of whom are severely disabled, if they are 
going to make it in life, need to have some future planning done 
for them, and one way to plan for the future is to do something 
about the resource problem that many of them encounter. 

Chairman Ford. Mr. McDermott. 

Mr. McDermott. No questions, Mr. Chairman. 



96 

Chairman Ford. Let me thank the panel very much for their tes- 
timony today. 

Mr. Weishaupt. Thank you, Mr. Chairman and we are available 
for further consultation. 

Chairman Ford. Thank you. 

Mr. McDermott, I am going to have to handle the emergency un- 
employment compensation bill on the floor. The rule is going to 
come up. Would you chair? It is going to come up about quarter of 
1. They are trying to bring the rule up. 

Mr. McDermott [presiding]. We will call the next panel of wit- 
nesses. Mr. Peysakhovich — if I did reasonably well. 

Mr. Peysakhovich. Pretty good. 

Mr. McDermott. Julia Roner, Paul Schroeder, and Stephanie 
Shelton. And we will have you testify the order in which I intro- 
duced you. 

Mr. Peysakhovich. 

Mr. Peysakhovich. Peysakhovich, yes, sir. 

Mr. McDermott. Last syllable. 

STATEMENT OF MARK E. PEYSAKHOVICH, PROJECT 
COORDINATOR, CHICAGOLAND SSI COALITION, CHICAGO, ILL. 

Mr. Peysakhovich. Mr. Chairman, before beginning, I would like 
to thank you for the opportunity to testify today. 

My name is Mark Peysakhovich and I am the project coordinator 
for the Chicagoland SSI Coalition, and I am here today on behalf 
of people like Ms. Dorothy Williams from Chicago who I just had 
a recent opportunity to meet. 

She is a 71-year-old SSI recipient who suffers from a whole slew 
of tremendous physical problems. Ms. Williams is dependent on an 
oxygen machine to assist her breathing, and her SSI check is not 
sufficient to cover even some of her most basic needs, including 
utilities. 

Recently she had to choose between paying her gas bill and her 
electric bill, and her solution was a simple one. Because of the oxy- 
gen machine that she uses and that requires electricity, she let her 
gas be cut off. 

I would also like to talk about the staffing problems at SSA. As 
you know, between 1984 and 1990, SSA underwent a significant 
and I would say a crippling downsizing in staffing, 21 percent to 
be exact. 

One issue that is raised by this problem is lack of outreach ca- 
pacity within the SSA. In Chicago, this translates to more than 
40,000 homeless, at least as many former general assistance recipi- 
ents who have been cut from the rolls, and huge numbers, even 
larger numbers of senior citizens and the mentally ill who could 
and should be getting SSI, but only if they knew about it. 

By far, the most serious problem we see in SSA offices is the 
delay in processing cases, and if an applicant has — if an applicant's 
initial application is turned down, the appeal process can take 
years. 

Another problem that insufficient staffing causes is the client's 
files have become lost for months and years and often professional 
intervention is needed to deal with that. Long waits at SSA offices 
are another problem. 



97 

Often when clients have to go to a Social Security office, we tell 
them to get there by 8:30 a.m. and to bring lunch. Many clients, 
particularly the severely disabled and the mentally ill, simply can- 
not manage the long waits. Some just give up and go home. 

Staffing problems at SSA have not been resolved by SSA's 1-800 
teleservice. While some basic services are available over the phone, 
the teleservice representative does not have actual access to a cli- 
ent's file. She can only punch up whatever information is available 
on the computer. 

I would also like to talk about the level of benefits for SSI recipi- 
ents. The SSI program serves a population requiring assistance in 
meeting their basic human needs of food, clothing, and shelter. 
They often have medical transportation and other living costs 
which are higher than those of the nonelderly and nondisabled pop- 
ulation. 

If you take $434 a month and assume that a person is working 
a 40-hour week and figure out that monthly income, the hourly 
wage so to speak would come out to $2.71 an nour, and surely that 
is not enough to live on. 

I could really attempt to shock you with stories of little old ladies 
having to share their pet food with their pet the last week of the 
month, but let me just point out instead that in Chicago, as well 
as any other city, it is impossible to rent even an inexpensive 
apartment and still have significant money for anything else. 

A study published in March 1993 in the Journal of Hospital and 
Community Psychiatry cites that nowhere in urban America were 
rents for efficiencies or one bedroom apartments affordable to SSI 
recipients, and this is according to the HUD definition of afford- 
ability. 

In Illinois, there is also a second application for a State supple- 
ment and a separate application for Medicaid. The triple SSI, SSP, 
Medicaid application is grossly inefficient. While SSI is the only 
lifeline available to many recipients and its intentions should be 
commended, these become a leash to poverty and hopelessness 
rather than a step up to hope and opportunity. 

In particular, we strongly support your colleague, Carrie Meek's 
bill, H.R. 2676, because it would resolve a lot of those problems, 
and thank you once again for listening. 

Mr. McDermott. Thank you. 

[The prepared statement follows:] 



98 



MARK E PEYSAKHOVICH 
CHICAGOLAND SSI COALITION 

Mr. Chairman, before beginning, I would like to thank you and 
the members of this subcommittee for holding this important hearing 
and also for the opportunity to present this testimony. 

My name is Mark Peysakhovich . I am the Project Coordinator for 
the Chicagoland SSI Coalition (Coalition) . The Coalition was 
established one year ago in response to growing concern with the 
shortcomings in the Supplemental Security Income (SSI) program and 
their devastating effects on the Chicago area. Currently, the 
Coalition is comprised of more than eighty social service and 
advocacy organizations representing the SSI constituency in the 
area. In the last year, we have had the opportunity to work with 
hundreds of SSI clients and advocates and to document their 
problems and concerns. 

I am here today on behalf of Dorothy Williams, a seventy-one 
year old SSI recipient who suffers from a whole menu of tremendous 
physical problems . Ms . Williams is dependent on an oxygen machine 
to assist her breathing. Her SSI check is not sufficient to cover 
even some of her most basic needs including utilities. Recently, 
she had to choose between paying her gas bill and her electric 
bill. Her solution was a simple one: because the of the oxygen 
machine, Ms. Williams let her gas be cut off. 

I am also here on behalf of Mr. Joel Scheffel who had a 
history of several severe epileptic seizures each day. Mr. 
Scheffel 's disability determination process took over two years 
while he was forced to depend on an inadequate patchwork of local 
and state assistance. As a result, Mr. Scheffel could not pay rent 
for an apartment and became homeless. In complete despair, he 
attempted suicide. Today, with a little money in his pocket, and 
even more importantly, with health care eligibility through the 
Medicaid program, Mr. Scheffel has been able to effectively control 
his seizures. He is attending a community college and remains an 
outspoken advocate for SSI reform. 

I am here for all the other people who view SSI as a life or 
death issue and many of whom remain in limbo today. The issues I 
raise here today are the issues we have encountered hundreds of 
times throughout the last year. 

I would like to stress that we support the suggestions 
contained in the SSI Modernization Project Final Report of the 
Experts published in 1992 and the SSI reform legislation (H.R. 
2676) sponsored by your colleague, Congresswoman Carrie Meek. 

First, I would like to discuss the staffing problems within 
the Social Security Administration (SSA) . As you know, between 1984 
and 1990 SSA underwent a significant, I might say crippling, 
"downsizing" in staffing. As the Modernization Report points out, 
current staffing levels remain approximately 21 percent below the 
pre-1984 levels. While SSA personnel are committed to providing 
high quality services to the public, given the reduced staff and 
the explosion of SSI applications and appeals, SSA district offices 
are unable to provide service in a timely, efficient, or orderly 
manner. Despite the best of intentions, SSA simply does not have 
adequate staffing to handle the workload. 

One issue that is raised by this problem is the lack of 
outreach capacity within SSA. Although it is very difficult to get 
recent and accurate data from SSA (for some of the same reasons 
outlined here) , it is commonly believed that only one half of SSI 
eligibles are on the rolls. In Chicago, more than 40,000 homeless, 
at least as many former state General Assistance (GA) recipients 
cut from the GA rolls, and huge numbers of senior citizens and the 
mentally ill could and should be receiving SSI - if they only knew 
about it. This problem was recently exemplified when a field 
officer from a local SSA office, previously assigned to work with 
the Coalition, was reassigned to take SSI applications because that 
office is "overwhelmed" . 



99 



By far, the most serious problem we see in SSA offices is the 

delay in processing cases. Four years ago, in 1989, the average 
time needed to process an initial disability determination was 64 
days. SSA' s own projections reflect that average will have grown to 
an average of 213 days in fiscal year 1993. 

If applicants' initial applications for SSI are denied, and 
nationwide about 57 percent of initial applications are denied, 
they face even more serious and frustrating delays. Currently, in 
the Chicago Office of Hearings and Appeals, it is not unusual for 
SSI applicants to wait five to seven months for their hearings to 
be scheduled, and several months for written decisions to be issued 
by the Administrative Law Judges. If there are no other 
complications, such as lost paperwork, and they are approved, they 
face several months of delays while their claims are processed for 
payment. From personal experience, I can tell you that hearing 
stories of three, four, and five year waits, including the appeal 
process, no longer astound me. 

The insufficient staffing causes other problems. Clients' 
files have become lost for months and even years at a time. Often 
professional intervention is needed before the SSA locates or 
recreates a client file. Without such intervention, it is certain 
that many files simply stay lost and the applicants give up. 

Long waits at SSA offices are another problem. Visits to SSA 
are known to take many hours. Often when clients have to go to an 
SSA office, we tell them to get there by 8:30 a.m. and to bring 
lunch! Many clients, particularly the severely disabled and 
mentally ill, simply cannot manage the long waits. Some just give 
up and come home . 

Staffing problems at SSA have not been resolved by SSA' s 1-800 
teleservice. While some basic services are available over the 
phone, the teleservice representative does not have access to an 
individual client's file. For example, if a new application 
has been lost, but had been recorded on the computer, the applicant 
will be told that the application is pending, when in reality it is 
in administrative "limbo" . The teleservice representative may not 
be able to tell that the file has not reached its destination and 
that no one is working up the claim. I can attest to waiting 20 
minutes at a time on hold at SSA' s 1-800 number. At times like 
that, I feel fortunate that I can generally use some contact at 
SSA and avoid the wait. 

One particular example of a problem caused by understaffing 
and long waits that I want to raise is in the case of substance 
abuse related disability. As you know, SSI benefits are 
retroactive. This means that a substance abuser, having gotten SSI 
at some stage of appeal, may get a bulk payment of ten or twenty 
thousand dollars for the past years. While the promise of having 
some money to count on is an important part of recovery, many 
specialists and clients agree that retroactive bulk payments leave 
substance abusers with choices they are not equipped to make. We 
suggest that by eliminating long waits many other problems may also 
be eased or solved. 

I would now like to turn my remarks to the benefit levels for 
individuals who receive SSI . The SSI program serves a population 
requiring assistance in meeting their basic human needs of food, 
clothing, and shelter. They often have medical, transportation, and 
other costs which are higher than those of the non-elderly and non- 
disabled population. SSI benefits should make it possible for those 
individuals to meet these needs and to live with a measure of 
dignity. As you know, SSI beneficiaries currently live in poverty. 

I could attempt to shock you with stories of little old ladies 
having to share pet food with their pet the last week of the month. 
Let me point out that in Chicago, as well as any other city, it is 



100 



impossible to rent an apartment, even an inexpensive one, and still 
have significant money for anything else. A study published in 
March of 1993 in a journal of Hospital and Community Psychiatry 
sites that nowhere in urban America were rents for efficiencies or 
one-bedroom apartments affordable to SSI recipients, according to 
the HUD definition of housing affordability. 

In Illinois, there are also other issues involved. A separate 
state supplemental payment (SSP) is available for the few who find 
out about it, but its formula has not been changed since 1969. 
Thus, percentage of eligible SSI recipients for the SSP as well as 
the amount of the grant itself is very low. In addition, 
eligibility for Medicaid in Illinois is not automatic. Many of the 
SSI recipients are placed on an additional "spendown" by the 
Illinois Department of Public Aid. Basically, our state says that 
you may be poor, but not poor enough for us, and you are going to 
have to spend some of your SSI check to prove to us that you need 
Medicaid. In such cases, as much as one-half or more of an SSI 
check can go to getting health care . In addition to the severity of 
this problem in terms of medical and human cost, the triple 
SSI/SSP /Medicaid application is grossly inefficient. 

The Coalition membership is grateful to the many fine people 
at SSA who make our lives a little bit easier. However, lack of 
allocated resources can only make survival more difficult for many 
SSI recipients and applicants who are very vulnerable to begin 
with. It has been our experience that inefficiency and confusion 
only breed more of the same . The information presented above only 
scratches the surface of all the issues that should be addressed in 
terms of the federal SSI program and its state components . While 
SSI is the only lifeline available to many recipients, and its 
intentions should be commended, it has become a leash to poverty 
and hopelessness rather than the a step up to hope and opportunity. 

Several member organizations of the Chicagoland SSI Coalition 
will be supplying written testimony for the record under separate 
cover. 

Thank you, once again, for the opportunity to present 
testimony today . I am happy to answer any questions you may have 
now or at a later date. 



Resp / £C^ully__Submitted, 



f 



Mark E. Peysakhovich 
Project Coordinator 
Chicagoland SSI Coalition 



101 

Mr. McDermott. You are going to testify for Ms. Roher. 

Mr. Maseroni. Yes, sir, if that is all right. 

Mr. McDermott. Surely. Please give your name. 

STATEMENT OF JULIA ROHER, CASE MANAGER, EMPLOYMENT 
OF SSI RECIPIENTS, CASE MANAGED SUPPORTED EMPLOY- 
MENT, AS PRESENTED BY ROBERT MASERONI, COMMUNITY 

. LIAISON, CITIZENS ADVISORY COMMITTEE— SSI APPEAL TO 
CONSCffiNCE IN MARYLAND 

Mr. Maseroni. My name is Dr. Robert S. Maseroni. I am staff 
to the Citizens Advisory Committee — SSI Appeal to Conscience in 
Maryland. 

On behalf of Julia Roher, I thank you for inviting me to testify 
today regarding the SSI reform. I work for an agency that helps 
with people who have developed mental disabilities in Bowie, Md., 
where I also reside. 

The past 5 years I have worked with this disabled population 
helping them try to receive all the benefits they are entitled to. I 
have also become a member of the Citizens Advisory Committee — 
SSI Appeal to Conscience organization. 

I am in favor of the final report of the experts, Supplemental Se- 
curity Income Modernization Project and I support several of the 
recommendations. 

For instance, one of my clients, Tony, receives $434 of SSI 
monthly to live on and receives $53 in food stamps. He currently 
has a utility gas bill that is over $500, which he is unable to pay 
off. He had his gas turned off until he pays his bill in full. 

Social services told him that he would not receive energy assist- 
ance because he does not have any children. He lives alone and 
winter is approaching quickly. This is why I am in favor of raising 
the SSI benefits 120 percent above poverty level. 

Speaking to another recommendation, if Tony were allowed to 
have roommates, he would be able to afford these bills because 
they would be shared. That is why I am in favor of eliminating the 
one-third reduction in benefits for people who live with someone 
else and receive SSI. 

Tony and another disabled individual could house themselves in 
an accessible housing apartment, share expenses, and be able to 
live and socialize more normally. 

I am also in favor of automatic Medicare with SSI benefits. If 
Tony had not been linked with professional services, he would not 
have known how to receive Medicaid. He has a very severe disabil- 
ity. Through my connections as a professional in the social services 
field, I am able to get Medicaid for people like Tony. I can do it 
quickly through SSI by writing one letter. 

But many others do not have the advantage of an individual case 
manager who can advocate for them, thus the need to have auto- 
matic Medicaid with SSI approval. 

I am also in favor of the 6,000 permanent outreach personnel to 
help people learn more about SSI. Through my experience in work- 
ing with transitionally disabled high school students to adult serv- 
ices, I find a large majority of the families unaware that SSI is an 
option for them. 



102 

Permanent outreach could overcome much of the ignorance of 
these already available rights. There is a need for SSI outreach 
work for not only teens, but for all people transitioning into SSI 
services. 

Most of the families I work with were unaware that such a door 
of opportunity exists. This means that people without professional 
caseworkers lose out on services. In actuality, we estimate that 
30,000 people may be eligible for SSI in Prince George's County, 
but there are little over 6,000 on the rolls. 

I am in favor of the work incentive, not work disincentive pro- 
gram. I currently am assisting disabled individuals to enter into 
the work force, however, I am unable to convince many partici- 
pants to sign up for my program because they tell me they cannot 
afford to lose what little benefits they are receiving if they should 
fail at work or not earn enough, and that is certainly true with the 
mentally ill people with whom I deal with. 

SSI recipients are afraid and sometimes incapable of doing the 
PASS/IRWE program because they do not want to lose their bene- 
fits. 

I am concerned with the recommendations which would establish 
a long enough period of time of work while receiving benefits so 
that stability may be established and termination of benefits be 
gradually withdrawn so the person may stand on their own efforts. 

I am in favor of raising the income exclusion from $65 to $200 
and reducing the SSI benefits by $1 for every $3 earned instead of 
the current $1 for every $2. 

I am also in favor of the recommendations from the final report 
of the experts, which would allow disabled single people to keep 
$7,000 in assets and couples retain $10,500 rather than current 
levels of $2,000 and $3,000 respectively. 

A new roof on the house, repairs on a furnace or a hospital stay 
can easily dissipate even these meager resources. This rec- 
ommendation doesn't cost government any new funding. 

Finally, I support the increase in Social Security Administration 
staff to reduce the waiting period for applicants who are disabled. 
For example, a member of our Citizens Advisory Committee SSI re- 
form waited 7 years for his SSI. The agency carried him for the en- 
tire time until he became eligible and he repaid the agency for the 
services received. 

Now, because of budget cuts at his agency, if this crisis arises for 
other clients awaiting SSI for longer than 90 days, as it does, there 
is no way this agency could carry them for years. The result for 
them is often homelessness and loss of services. 

In closing, I thank you again for inviting me to testify. I know 
that I only am able to reach a small percentage of the disabled pop- 
ulation through my work, but it is gratifying to see people like 
Tony transcend their disability with a little help, and Tony is only 
one of many, many crisis cases. I hope you will support the changes 
that have been proposed in my testimony. 

Thank you, sir. 

Mr. McDermott. Thank you. 

Mr. Schroeder. 



103 

STATEMENT OF PAUL W. SCHROEDER, DIRECTOR, GOVERN- 
MENTAL AFFAIRS, AMERICAN COUNCIL OF THE BLIND 

Mr. Schroeder. Good afternoon, my name is Paul Schroeder and 
I am director of governmental affairs for the American Council of 
the Blind. 

I have also been a recipient of SSI for approximately 1 year. I 
have lived in States with good, little, and no subsidy. I have experi- 
enced the work incentives. I have experienced the appeals and 
some of the degrading treatment that people with disabilities go 
through. I have also experienced the pride of independence from 
the rolls. 

I hear the stories similar to mine in the job that I now hold at 
the American Council of the Blind. Overall what I wish to suggest 
to the subcommittee and to Congress in general is that the SSIpro- 
gram needs more resources and less complexity. 

The American Council of the Blind has long urged the SSI pro- 
gram to receive sufficient resources that monthly benefits can be 
Drought to proximity — at least proximity with the Federal poverty 
line. We support the 120 percent recommendation of the SSI mod- 
ernization project. 

We also wish to note that people who are blind, who have other 
disabilities, usually face even higher proportional costs of living 
and additional expenses than non disabled individuals. For exam- 
ple, because of inadequate public transportation and difficulties 
getting around independently, blind people often use taxicabs to 
travel to work, conduct business, and perform personal errands, 
while other individuals can, of course, drive a personal automobile, 
if they own one, take public transportation, or even walk. 

In most communities, taxicabs, even for a short distance, taxi 
fares are fairly steep. Individuals with disabilities often pay for 
personal assistant services in order to live independently. In addi- 
tion, individuals with disabilities, particularly blind people, often 
need special technology simply to help them carry out the basic 
tasks, such as communication. 

These devices often cost thousands of dollars and few dependable 
means of financial or technical assistance are available. 

Therefore, for all of the reasons which have been cited this morn- 
ing, and for the reasons which I have just included, we believe that 
a first and top priority of this subcommittee ought to be to move 
the SSI program in a direction which provides for at least a poverty 
level of benefit. 

Second, we believe that the staffing issues can be addressed and 
should be addressed with deliberate speed. 

In particular, we would like to offer that for people who are 
blind, under SSI, we believe that some of the staff backlog could 
be diminished. 

Because the definition of blindness is functionally based, it is un- 
necessary for the condition of blindness to be reviewed at the DDS 
level. Eligibility determinations and backlog would be improved by 
adopting one of the following changes: You could either empower 
field staff to determine whether or not the available medical evi- 
dence supports an applicant's claim of blindness. 

Second, and I think less desirable, a centralized Federal program 
could be developed simply to review the medical evidence of blind- 



104 

ness. It is indeed the simplest definition within the SSI program 
to determine. 

We concur with the recommendation regarding resources that 
has been put forth by the SSI modernization project. We believe 
that increasing the resources available would help make the pro- 
gram more responsive in terms of eligibility and would assist ulti- 
mately in allowing someone to move to independence. 

A $2,000 limit on resources requires someone obviously to spend 
into poverty and to emerge from SSI, if they are able to, with vir- 
tually nothing to stand upon. 

In-kind support, we believe, within the SSI program is one of the 
most bureaucratically burdensome and mean-spirited parts of the 
program. To penalize a recipient for trying to be responsive, for try- 
ing to improve his or her situation is, in fact, a horrible and tragic 
burden. 

In addition, the paperwork, staff time, and other problems put 
upon the SSA staff who are trying to determine the level of in-kind 
support are absolutely incredible and wasteful. 

I experienced this myself, both the indignity of having one's life 
probed into, house mates, others with whom the person is associ- 
ated, queried about their association with a SSI applicant. It is 
something which should be dropped forthwith. 

I want to touch for a moment on work incentives and simply to 
note that the passage of the Americans with Disabilities Act, the 
accompanying publicity about that act and as well the reemphasis 
of employment in the rehabilitation act amendments of 1992 
should dramatically improve employment opportunities for people 
with disabilities. 

SSI must respond to these improved opportunities. Issues around 
Medicaid, particularly the section 20903) allowance for States to es- 
tablish a separate Medicaid eligibility needs to be eliminated. 

In addition, countable income, which is a second area of extreme 
complexity within the SSI program, countable income and the work 
expense reductions which are available to SSI applicants both need 
to be addressed as part of a work incentive program. 

ACB recommends that the current impairment-related work ex- 
penses and the blind work expenses should be explored to deter- 
mine if, in fact, these incentives are too confusing, both to recipi- 
ents and to program staff. It is likely that the elimination of the 
extensive recordkeeping and paperwork may well make this — the 
recommendation put forward by the SSA modernization project to 
increase income and to improve the reduction of benefits to a $1 
for $3 may well make these work incentives no longer necessary, 
or at least no longer necessary for most people. 

We urge, of course, that individuals continue to have the choice 
of documenting their work expenses. ACB also believes that it must 
stress to this subcommittee that we are supportive of changing the 
impairment-related work expenses to reflect the same levels associ- 
ated with the blind work expenses and the same means of calcula- 
tion. 

There is no reason for these two work expenses to be different, 
and as a blindness organization, we wish to put our support forth- 
with for the improvement of IRWEs, if they are kept in the pro- 
gram. 



105 

Last, I simply want to note that I would hope that this sub- 
committee would ask Social Security Administration officials to 
submit evidence that shows that outreach and case materials are 
produced promptly in accessible alternative formats to regular 
print. By these, I mean Braille, large print, cassette tape, and elec- 
tronic file. 

Many people who are eligible and who are currently on the SSI 

Erogram are unable to read print, obviously because of blindness, 
ut also for many other disabilities and the Social Security Admin- 
istration needs to dramatically improve its ability to communicate 
and outreach to these individuals. 
Thank you very much for the opportunity to testify. 
[The prepared statement follows:] 



106 



STATEMENT OF PAUL W. SCHROEDER 
AMERICAN COUNCIL OF THE BLIND 

Mr. Chairman and members of the Subcommittee, my name is Paul Schroeder. I am 
Director of Governmental Affairs for the American Council of the Blind, the nation's 
largest and most diverse organization of blind and visually impaired persons. ACB is 
pleased to provide comments with respect to the Supplemental Security Income program 
and, specifically regarding the Social Security Administration's "Supplemental Security 
Income Modernization Project." We compliment the efforts of the SSI Modernization 
Project to thoroughly examine the Supplemental Security Income program and suggest 
comprehensive reforms in this very important income maintenance program. The Project's 
report has framed in clear and articulate language the current status of the SSI program and 
its many limitations. Of even greater value is the inclusion within this Paper of much of the 
best current thinking regarding recommendations for improvement in the SSI program. I 
wish to comment on some of the recommendations included in the SSI Modernization 
Project report, and to address some specific concerns of the American Council of the Blind. 

INTRODUCTION 

The Supplemental Security Income program h as s^ved pillions of recipients from 
utter impove rishment however, bureaucratic obstacles- insufficient federal benefit levels- 
unchanged resource and income limitations, and inadequate work incentives keep SSI out 
of reach of m any needy people, while shu^Kny th» drive and determination of recipients 
who wish to achieve jej f sufficiency. For nearly 20 yean, SSI has proven to be of critical 
importance, but many provisions of the program no longer reflect current economic or 
social realities. Significant changes in the SSI program are necessary so that it reflects 
changed circumstances, including the passage of the Americans with Disabilities Act 

The SSI program faces two critical realities. Many recipients (because of age or 
other factors) will not find reliable, ongoing employment and these individuals should be 
assured of an income at least at parity with the federally-determined poverty level. 
Improved opportunities resulting from the Americans with Disabilities Act, improved 
vocational rehabilitation services and improvements in other programs and services will 
enable other individuals to seek gainful employment and SSI should be designed to afford 
maximum assistance to these individuals. Work incentives now in place are not sufficient 
to meet this challenge and current income and resource limitations serve as an obstacle to 
independence and gainful employment 

L DISCUSSION OF PRIORITIES FOR CHANGE 

Each SSI recipient, or potential recipient, possesses a special set of needs and 
circumstances which profoundly shape his or her needs under the SSI program. For some, 
-ongoing income is most critical. Others need a "safety net" to allow them to become self 
sufficient Still others are most in need of medical benefits. Balancing these needs and 
setting priorities among them is virtually impossible. However, the findings of the SSI 
Modernization Project, as well as 20 years of "Irving" with this program clearly show that 
certain categories of changes must be made. Without dramatic and comprehensive 
improvement, the SSI program will not succeed either as a income maintenance program 
or as a means to help SSI recipients move out of poverty. The most critical changes require 
statutory amendment and/or additional appropriations. However, some important 
improvements can be made administratively and we hope that this Subcommittee will urge 
the Department of Health and Human Services and the Social Security Administration to 
take action on those improvements in the SSI program over which they have administrative 
control 

The American Council of the Blind supports the basic intent of the four priorities 
listed in the SSI Modernization Project report: 

-increase SSA staffing; 

-increase the Federal benefit standard; 

-stop counting, as income, in-kind support and maintenance; and 



107 



-increase the resources limits, while streamlining the resources exclusions. 

Among these priorities. ACB urges Congress to put immediate emphasis on 
increasing the federal benefit level and on increased staffing and related changes to improve 
the tune lines for program decisions. 

Federal Benefit 

The American Council of the Blind has long called for an increase in the cash payment to 
SSI recipients as a high priority in bringing rational improvement in the SSI program. 
However, accomplishing this needed change will require a great deal of effort 

We completely support the SSI Modernization Project Panel's recommendation to 
raise the SSI Federal benefit standards to 120 percent of the poverty guideline for 
individuals and couples. Our society must assure subsistence at least equivalent to the 
federal poverty level for individuals dependent on SSI. 

The higher proportional costs for essential items such as food, clothing, housing and 
transportation borne by the poorest individuals and families in our society is now well 
established. These individuals do not have access to the variety of choices which are 
typically available to the majority of Americans who live in or near suburban 
housing/shopping developments. People who are blind or who have other disabilities 
usually face even higher proportional costs of living or additional expenses not generally 
faced by nondisabled individuals. For example, because of inadequate public transportation 
and difficulties in getting around independently, blind people often must use taxicabs to 
travel to work, conduct business and perform personal errands, while other individuals can 
drive a personal automobile, take public transportation or even walk. In most communities, 
taxi fares, even for relatively short distances are quite steep. Individuals with disabilities 
often pay for personal assistance services in order to live independently. In addition, 
individuals with disabilities, particularly blind people, often need special technology to help 
them carry out basic tasks such as communication, including reading and writing. These 
devices often cost thousands of dollars and few dependable means of financial or technical 
assistance are available. Therefore, we strongly urge the Congress to move forward on 
implementing this minimal level of federal benefit which the SSI program was supposed to 
guarantee. 

Staffing/Backlog Issues 

The backlog in eligibility determination, especially for a program providing assistance 
to the very poor, is particularly harmful. SSI-eligible individuals obviously have little or no 
resources or income on which to rely during delays in eligibility determination. While 
altering the definition of disability under the SSI program could alleviate some of the 
backlog at the Disability Determination Services (DDS), ACB believes that some of the 
backlog could also be eliminated with a change in the determination of blindness. Because 
the definition of blindness is functionally-based, it is unnecessary for the condition of 
blindness to be reviewed at the DDS level. Eli gibility determinations and backlog could be 
improved by adopting one of the following changes: 

1. empowering held staff to determine whether or not the available medical 
evidence supports an applicants claim of blindness; or, 

2. establish a central federal determination system to review the medical 
evidence submitted by an applicant alleging blindness. 

In either case, an individual denied for SSI because of insufficient evidence to 
support blindness could then submit an application alleging some other disability (conditions 
which cause partial vision loss often also cause other disabilities). Alternatively, the 
individual could appeal the denial 

Resources and Eligibility 



108 



When establishing and administering need-based public assistance programs, those who 
frame public policy should carefully consider the time and effort which must be expended 
in gathering information needed to document an applicant's claim. The difficulty involved 
in obtaining such information and the often demeaning circumstances under which it is 
sought also must be considered. While not unique in its extensive bureaucratic 
requirements, the SSI program contains several examples of eligibility and related 
requirements which are exceedingly difficult to satisfy both for individual 
applicants/recipients and SSI staff. 

Assets/Resources 

SSI is a need-based program which justifiably includes eligibility criteria to assess an 
individual applicant's need. An assessment of an individual's available resources and assets 
is one necessary criterion. However, the current resource test used to establish eligibility 
for the SSI program is unnecessarily restrictive and deleterious to the important goal of 
enabling a recipient to gain independence and self sufficiency. Indeed, the current 
approach is especially damaging to the recipient, or applicant, whose long-term goal is 
independence from SSL 

The American Council of the Blind urges Congress to amen d the SSI program to 
enact these changes to the current approach to "countable resources" as part of a packag e 
to improve the prospects for independence for SSI recipients: 

1. Increase resource limits to at least $7,000 and $10400 as recommended 
in the SSI Modernization Project Report 

While a $7,000 limit (individual) and $10,500 limit (couples) is a very modest amount 
of assets, this level allows the recipient to establish a minimal amount of security in 
order to address emergency needs such as home repair or, a modest step toward self- 
sufficiency if he or she elects to leave the SSI program. 

2. Maintain current exclusions 

ACB believes that even with an increase in the resource limit, m aintainin g current 
exclusions such as a home, life insurance and burial funds is a sensible and humane 
approach. The current exclusions should be maintained even if resource limits are 
raised to the levels recommended above. 

In-kind Support and Maintenance 

Few aspects of the Supplemental Security Income program are as bureaucratically 
burdensome and mean spirited as the counting of in-kind support against a recipient's cash 
payment The amount of staff effort expended in determining the value of support, 
pursuing the contributions provided by a recipient's housemates and es tablishin g the amount 
of overpayment let alone processing the paperwork generated by these inquiries, is a tragic 
waste of time, resources and staff morale. The damage caused to SSI recipients' self 
esteem, independence and initiative is tragic as well ACB belief s fV* the resources 
expended in thi«f effort and the harm done to individuals warra nts the elimination of the 
counting an rf a ssessmen t Qfjeea aMg for Jn-l""d support SSI field staff should be spending 
their time in more rewarding and useful ways than pursuing documentation of the meager 
in-kind and other supports which recipients are able to achieve. Indeed, recipients should 
be encouraged to seek this kind of assistance as part of an overall strategy to lessen 
dependence and enhance individual self sufficiency. 

Deeming of Parents' Resources 

The American Council of the Blind supports the SSI Modernization Project Panel 
recommendation regarding the deeming of parental resources where one or more SSI- 
inehgible children are in the child's family. The Report calls for the exclusion or deeming 
of $2,000 (index) to each ineligible child in the family. In addition, the special disability- 



109 



related costs which parents must bear should also be excluded from the child's resources 
since these dollars are obviously not available to meet the child's other needs. 

IL WORK INCENTIVES 

Taken together, implementing the above recommendations will lead to substantial 
improvements in the SSI program. However. ACB strongly supports the need for 
amendments to and changes in the administrati on of the SSI program in order to improve 
the work incentives available to SSI recipients who strive for independence and self- 
sufficiency. 

The American Council of the Blind believes that most people with disabilities want 
to work. Presumably, SSI recipients are not an exception. Passage of the Americans with 
Disabilities Act and the accompanying publicity of its provisions, as well as the enhanced 
emphasis on employment in the 1992 amendments to the Rehabilitation Act should 
dramatically improve employment opportunities for people with disabilities. The 
documented desire of people with disabilities to work, combined with the protection against 
discrimination and enhanced opportunities provided by the ADA and the Rehabilitation Act 
make the work incentive provisions of SSI doubly important Issues around Medicaid 
eligibility must also be addressed in any improvements in work incentives under the SSI 
program, e. g.. the provision under Sec. 209 (b) which allows states to establish separate 
Medicaid eligibility should rxi eJBBBBJfidi 

Countable Income 

As one of the more archaic provisions of the SSI program, the income exclusions and 
countable income rules and levels should be given attention. Toward this end, ACB urges 
Congress to seriously examine the SSI Modernization Project Panel's recommendations 
regarding changes in the exclusion of unearned income, as well as the counting of earned 
income and the benefit reduction formula. 

The Report calls upon Congress to Raise the income exclusion from $65 to $200 and 
reduce the SSI benefit by $1 for every $3 (instead of the current $1 for every $2) of earned 
income over $200. This "one for three reduction" is the approach now taken for working 
retirees age 65-69 under Title II of the Social Security Act The Report further 
recommends that "the increased exclusion amount would be intended to compensate the 
recipient for his/her work expenses." ACB recommends that the current Impairment 
Related Work Expenses (ERWE) and Blind Work Expenses (BWE) be explored to 
determine if these incentives are too confusing to both recipients and program staff alike. 
It is likely that the elimination of extensive record-keeping and paperwork may well make 
this recommendation worth exploring. However, as the Report recommends, "individuals 
whose actual work expenses are more than the amount of earnings excluded (i.e., more than 
$200 phis two-thirds of the remaining income) should continue to have an individual 
exclusion computed which would consider the person's actual work expenses." 

ACB wishes to stress that whether or not a change such as that recommendftd above 
is adopted. IRWE should be changed to be equivalent with BWE. The members of this 
organization believe that parity should be established in the SSI programs by bringing 
individuals with other disabilities up to the work expense level and calculation method now 
available to blind individuals. In addition, field staff should receive better training to help 
them better understand the nature of BWE which are any expenses related to work. 

ACB also urges a modification in the counting of income which fluctuates. If income 
is likely to fluctuate, (this can occur for many reasons— intermittent work, irregular pay 
periods, etc.), the counting of income should be annualized so that an individual is not 
needlessly considered ineligible for an SSI payment or more important for continued 
receipt of Medicaid. 

PASS 

The American Council of the Blind supports many of the recommendations made 
by the SSI Modernization Project regarding the SSI provision for a Plan to Achieve Self 
Support (PASS). For example, it is reasonable for field staff to make a determination on 



110 



a PASS within 30 days. As the Report recommends, if this 30 day time limit is not met, the 
PASS should be considered approved, and if it is later disapproved, resulting benefit 
changes should be prospective not retrospective, i.e., resultant payments, which should begin 
at once based on application of the plan exclusions, would not become overpayments if the 
plan were subsequently disapproved. 

In addition, ACB supports the recommendation that SSA alter the current 
administrative time limit on the duration of a PASS. Any time limit should consider the 
nature of the Plan. For example, the expected outcome of a Plan, e.g., education may 
indicate a useful guideline for the time needed to complete the PASS. Or, other factors 
may be important guides in establishing a reasonable time period, e.g., the vocational goal 
of establishing a small business may require a few years to show a profit Disability 
considerations should also be accounted for in imposing any time limits on a PASS. For 
example, an individual who is blind may take longer to complete postsecondary education 
or vocational training because of program access obstacles faced by blind people. 

Independence Account 

Although the SSI Modernization Project Panel rejected the recommendation for an 
"Independence Account," such an incentive should be explored, particularly if resource levels 
are not substantially increased. The Independence Account would operate similar to the 
Program to Achieve Self Support (PASS) so that individuals or couples could set aside 
resources in order to prepare for independence. Approved items for such an account 
should include such things as the purchase of a home, assistive technology/device or vehicle, 
relocation for employment or other valid reason, personal assistance services, child care and 
other expenses necessary to achieve independence. Recipients, working or not working, 
should be able to establish such an account 

m. APPEALS 

The appeal process in both the SSI and SSDI programs is unnecessarily bureaucratic 
and impersonal. The American Council of the Blind supports the two primary 
recommendations of the SSI Modernization Project with respect to improvements in the 
a ppeal process . The Report calls for the elimination of the reconsideration level of appeal, 
and for providing claimants with an opportunity for a face-to-face interview with the 
decision-maker prior to issuing a denial based on lack of disability or insufficient evidence 
to support blindness. 

ACB also supports a change in the statute to establish time limits for the 
determination of blindness or disability as well as for the adjudication of appeals. We note 
that the 1992 amendments to the Rehabilitation Act include a requirement for eligibility 
determinations within 60 days. 



IV. OTHER NECESSARY IMPROVEMENTS 
Training and Sensitivity 

Individuals applying for SSI have the right to be treated with dignity and respect 
Currently, however, complaints about poor, degrading, and humiliating treatment of SSI 
applicants and recipients by SSA staff are quite common. Disability-awareness and 
sensitivity training will require resources which will affect allocation of those resources to 
other needs. However, building disability-awareness and sensitivity into staff recruitment 
and screening processes will lessen the need for future training. In addition, several 
agencies will provide disability-awareness training at little or no direct cost For example: 
many advocacy organizations provide training regarding the concerns and needs of those 
they represent; most state affiliates of the President's Committee on Employment of Persons 
with Disabilities, as well as most vocational rehabilitation agencies also have staff who can 
provide this training. Making use of such existing resources would greatly minimize the cost 
to the Social Security Administration. 

One additional step would be needed: commitment on the part of Social Security 



Ill 



Administration management, at all levels, to stress to staff the importance of treating people 
who are receiving or seeking benefits with the utmost respect and dignity. Attitudes can 
change, but bringing about this change requires dedicated management leadership. 
Incidentally, part of this leadership should be a commitment to recruit and hire workers 
with disabilities and older workers. 

Clearly, these modest steps are only a beginning. However, ACB believes these actions 
could be taken with minimal costs and burden to SSA, and the long-term effect on improved 
interactions between recipients and program staff would be very positive. 

Information and Referral 

A second, relatively immediate, improvement which SSA could implement is 
improved information and referral capacity among SSI field staff. Providing SSI field office 
staff with resource lists and a modest amount of time to establish a working relationship 
with staff in the many existing assistance programs and resources in the local community 
would be well worth the effort The "one stop" approach to human services has long been 
advocated by many in the field. While we are not yet close to that reality, SSI staff, as an 
important link in the system of services and supports-often a point of first contact— should 
possess the knowledge and ability to steer individuals toward services such as nutrition and 
health counseling, food stamps, employment/vocational training, housing, transportation, etc. 

While the direct cost to the Social Security Administration in implementing this 
approach to information and referral would be relatively modest, the demand for staff will 
increase and the work of those employees will be altered. ACB believes that relieving SSI 
staff of other current burdens would enable staff to begin to undertake an enhanced 
information and referral role. Because this primarily requires administrative initiative and 
flexibility, rather than statutory change, it should be more easily implemented. 

V. A NOTE ABOUT ACCESS TO THE PROGRAM 

ACB continues to call upon the Social Security Administration to improve its provision of 
program and case-related documents in formats which individual recipients can read and 
use independently. Specifically, SSA must improve the availability of documents in Braille, 
large print, cassette tape and electronic file. Any one of these formats alone is not 
sufficient to meet the needs of the large number of SSA consumers who do not read 
standard print The accessible formats mentioned above are no longer difficult to produce 
and the expense can be minimized through technology and judicious production. Indeed 
SSA has an obligation, as a federal agency, to make its programs accessible to people with 
disabilities. 

ACB urges Congress to direct the Social Security Administration to submit evidence which 
shows that outreach and case materials are produced promptly in alternate formats to 
regular print e.g . jagjfe lar ge print cassette tape and electronic file and that the 
availability of materials in alternative formats is publicized. In addition, SSA should be 
asked to show that publicity/outreach information is distributed to agencies/organizations 
of and for the blind, radio reading services, parent groups, optometrists and 
ophthalmologists. And, evidence that public service announcements for television have been 
thoughtfully scripted and/or audio described in order to provide the same information in 
audio which is communicated visually. We do wish to compliment SSA on its efforts to 
provide specific information through the radio reading service network. These services 
provide over-the-air information to eligible individuals who are unable to read or use 
standard printed material 

VL CONCLUSION 

The American Council of die Blind is committed to working with the Congress and the 
Social Security Administration in order to find ways to improve the SSI program. The work 
of the SSI Modernization Project establishes an excellent starting place for Congressional 
and Administration efforts to enable die SSI program to meet its early promise to help lift 
the poorest of the poor oat of poverty. 



112 

Mr. McDermott. Thank you all three. 

Let me ask you a question, Mr. Schroeder. You suggest face-to- 
face interviews in your testimony, and I wonder if that wouldn't 
slow down the process. One of the things we worry about — at least 
looking at the backlog — is how can you speed the process. I wonder 
if you have a face-to-face interview with everyone, if you would in 
fact slow down the process. 

Mr. Schroeder. That recommendation actually — and thank you 
for the question — is in reference to a discussion of appeals in my 
testimony. It is in that context that I recommend a face-to-face 
interview being available, which I think would short circuit some 
of the paperwork and documentation flowing back and forth be- 
tween individuals and SSA before that individual has ever been 
able to sit down with somebody in the field office to talk about the 
medical condition, particularly people who are blind. 

Mr. McDermott. So you are basically talking about the second 
step, after somebody has been rejected and they appeal it? 

Mr. Schroeder. That is correct, sir. 

Mr. McDermott. OK. I sit here listening to this, I have so many 
questions, but on the other hand, I think if anybody who objects 
to this program had to go out and spend a day sitting and examin- 
ing cases, they would very quickly stop making assertions about 
this program. In my professional role in my other life, I frequently 
had to examine people and testify on their behalf on SSI rejections. 
So I sit with a certain amount of disbelief at people who, if they 
looked carefully at who the population is in the SSI program, 
would come away saying that there are people who should lose 
their SSI. 

The myth of the welfare queen is applied to this program too, 
that there are somehow people out there who are ripping it off. I 
think the biggest problem for the program is figuring a way to 
quickly make decisions and get people on it who need benefits. 

One of my questions to the three of you is about the issue of giv- 
ing people benefits and then asking for repayment if they are 
judged not to be eligible for the program. What kind of problems 
do you think that would create? 

Mr. Maseroni. Well, that has been done to some of our people 
who are mentally ill after they got better. It creates horrendous 
things in all cases, when the pulling back of funds was unjustified. 
People had to go through a horrendous process; plus deal with the 
terror of losing everything that they had finally gotten. 

Mr. McDermott. Are you saying that they were on the program? 

Mr. Maseroni. Yes. 

Mr. McDermott. Having been judged to be eligible? 

Mr. Maseroni. Yes. 

Mr. McDermott. Then how did they get taken off the program? 

Mr. Maseroni. There was a miscalculation made in the SSA of- 
fice or they were credited with benefits they didn't get, and the 
benefits were pulled or terminated. 

Mr. McDermott. So it was not a matter that they were started 
on benefits before an adjudication was made? 

Mr. Maseroni. No, I am not talking about a work incentive. I 
am just talking about that kind of mix up. 



113 

Mr. Peysakhovich. If I could just point out that I think, and in- 
deed everyone I work with thinks that one of the greatest expenses 
to the SSI program is this back and forth policing. 

I think, in fact, if Congress and the Social Security Administra- 
tion attempted to do that to try to get repayment in such an in- 
stance, they would probably find themselves spending more money 
than they would be saving. 

Mr. McDermott. Because of the nature of the people who are on 
SSI and the economic circumstances of the people who have re- 
ceived the money? 

Mr. Peysakhovich. Not necessarily. The process itself takes a — 
I mean, it takes a lot of staff time and it takes a lot of work, cou- 
pled with the — some inefficiencies in the computer system and the 
staff system. You probably know this. 

I mean, if somebody gets an overpayment now and gets notice of 
an overpayment, they can initiate a process of appeals. I mean, you 
can appeal any decision. And you can also do some horse trading. 
You can go in there and say, well, I can't pay you $100. I will pay 
you $10 back. The guy at the other end of the line says, OK, if you 
pay us $10 back, it will take you 2,000 years to pay back. You have 
to pay $75. 

So I think that a lot of staff time and a lot of recordkeeping and 
a lot of administrative costs would probably cost more money than 
they would be saving or recouping. 

Mr. Schroeder. I think the amounts of money are relatively 
small in this program, and I can tell you that one of the greatest 
fears I have ever had in my life was to receive a notice that I re- 
ceived from SSA that I owed them $1,500 in an overpayment. 

First of all, the notice was unaccessible and we ran into several 
problems around that. But after that was straightened around, I 
appealed through the administrative law judge level, costing SSA 
Lord knows how much money and it resulted in a $2.22 finding 
against me. I remember that figure and always will, and I can only 
imagine how much time and money was wasted by SSA in that ef- 
fort. 

I think the problem with overpayment comes from several 
sources, both mistakes made by claimants and their applicants, 
beneficiaries in this case — these were my mistakes in large part, 
but also mistakes made by the field office staff, and we have heard 
about some of those. Both contribute to the problem. 

I sense there is probably little worth in the effort now in most 
instances to go after those who have been overpaid benefits. 

Mr. McDermott. Thank you very much, all of you, for coming. 
We appreciate your testimony. 

The next panel is Larry McElwain, Elizabeth Boggs, and Fred 
Rockwood. I would remind all of you — I didn't say it to the last 
panel, but I will say it to this panel — as you know, your entire 
statement will go into the record without objection. So if there are 
things you want to say beyond that, rather than read into the 
record what you have already written, that might be most useful 
for the staff and the committee. 

You each have 5 minutes. Why don't we start with Mr. 
McElwain. 



114 

STATEMENT OF LARRY K. McELWAIN, CHAIRMAN, GOVERN- 
MENT AFFAIRS COMMITTEE, NATIONAL FUNERAL DIREC- 
TORS ASSOCIATION, ACCOMPANIED BY SCOTT GLLLIGAN, 
GENERAL COUNSEL 

Mr. McELWAIN. Thank you, Congressman McDermott. I really 
appreciate the opportunity to be here this afternoon and to talk to 
you about the SSI modernization issue. 

My name is Larry McElwain. I am a funeral director and I am 
chairman of the National Funeral Directors Association, Govern- 
mental Affairs Committee. Scott Gilligan is our general counsel 
and he is here with me this afternoon. 

The National Funeral Directors Association is a federation of as- 
sociations representing all 50 States and the District of Columbia. 
We are the largest organization of funeral service professionals in 
the country. 

Approximately 98 percent of our 15,000 member firms provide 
consumers the opportunity to prearrange or to prepay their ex- 
penses for a funeral. 

We are concerned about the general recommendation of the SSI 
modernization panel to eliminate many current resource exclu- 
sions, including those for funds set aside for the funeral and burial. 
Our position is that these exclusions should be retained. 

Prepaid funeral arrangements are funded in various ways, in- 
cluding trusts, insurance policies and annuities. Some arrange- 
ments are irrevocable, meaning that they cannot be changed or 
canceled by the consumer, and the State laws across this country 
vary regarding the use of revocable and irrevocable instruments. 

Tne SSI program currently provides that irrevocable funds avail- 
able to meet the funeral and related expenses are not considered 
to be resources. In addition, the program allows a $1,500 burial 
fund and a burial space exclusion for revocable arrangements. 

Interest and accruals on those trusts or insurance on burial 
space and burial funds are also excluded. 

Current exclusions work well in all States because they offer the 
consumers in those States a variety of funding instruments and fa- 
cilitate variations in State laws. 

First and foremost today, we believe that current SSI exclusions 
for funeral and burial funds constitute sound public policy. Funeral 
expenses are inevitable. The cost of a funeral for individuals with- 
out resources at the time of death is generally borne by State and 
local government programs, unless prepaid arrangements have 
been made in advance by those persons or their families. 

The panel reports it was told repeatedly during hearings that 
SSI benefits are not adequate to provide a dignified quality of life. 
In 1982, Congress recognized that SSI benefits were not adequate 
to provide dignity in death either. 

In recognition of this inadequacy, Congress took action to ensure 
that SSI recipients could provide for this necessary final expense 
via prepaid funeral contracts without forfeiting their right to re- 
ceive SSI benefits. 

Current SSI funeral resource exclusions constitute articulated 
public policy on care for the elderly and disabled that recognizes as 
a part of that obligation the provision for a dignified funeral and 
burial. 



115 

An overall increase in allowable resources alone, as one of the 
proposals put forth would be, would not be sufficient to ensure the 
availability of funds for a funeral and burial. If resource exclusions 
for a funeral and burial funds are not maintained, we believe that 
increased allowable resources will be likely used by recipients for 
day-to-day sustenance purposes without consideration of the need 
for monetary resources at the time of death. 

The continued formal designation of these funds is necessary, we 
believe, to insure that the funds remain intact for the designated 
purposes during the recipient's lifetime. 

In summary, we wish to leave you with two clear messages 
today. First, we oppose any changes that would eliminate current 
resource exclusions for funds set aside for a funeral and burial. 
Second, we are the leading national expert on funeral services with 
direct lines of communication to our constituent associations in 
every State and the District of Columbia. 

We ask you to call upon us as a committee and staff for assist- 
ance as you continue to study the complex ramifications of the 
board recommendations of the SSI modernization panel. 

We are an unbiased resource in that we do not favor one funding 
instrument over the other. We believe it is in the best interest of 
funeral directors and their consumers to offer the widest variety of 
products and services possible. Current law and regulation strikes 
a delicate balance between all funding instruments, and changes 
could easily tip this market balance in favor of one instrument or 
another. 

If we do not have information you require, we pledge we will get 
it. If Members of Congress or the administration determine that 
changes impacting resource exclusions for funeral and burial funds 
are required for some specific reason, we will develop viable propos- 
als with you and for you. 

On behalf of our 15,000 members, we thank you for your consid- 
eration of our concerns and we will be most happy to entertain any 
questions that you may have regarding our concerns. 

Thank you, very much. 

Mr. McDERMOTT. Thank you. 

[The prepared statement follows:] 



116 



STATEMENT OF LARRY K. McELWAIN 
NATIONAL FUNERAL DIRECTORS ASSOCIATION 

Thank you Chairman Ford, and distinguished members of this 
subcommittee for the opportunity to speak to you today. 

My name is Larry McElwain, and I am the Chairman of the NFDA 
Government Affairs Committee. Scott Gilligan, our General 
Counsel, is with me this morning. 

The National Funeral Directors Association is a federation of 
associations representing all 50 states and the District of 
Columbia. We are the largest organization of funeral service 
professionals in the country. Approximately 98 percent of our 
15,000 member firms provide consumers the opportunity to 
prearrange and/or prepay expenses for a funeral. 

We are concerned about the general recommendation of the SSI 
Modernization Panel to eliminate many current resource 
exclusions, including those for funds set aside for a funeral 
and burial. Our position is that these exclusions should be 
retained. 

Prepaid funeral arrangements are funded in various ways, 
including trusts, insurance and annuities. Some arrangements 
are irrevocable, meaning they cannot be changed or cancelled by 
the consumer. State laws vary regarding the use of revocable 
and irrevocable instruments. 

The SSI Program currently provides that irrevocable funds 
available to meet funeral and related expenses are not 
considered to be resources. In addition, the Program allows a 
$1,500 burial fund and a burial space exclusion for revocable 
arrangements. Interest and accruals on burial space and burial 
fund are also excluded. 

Current exclusions work well in all states because they offer 
consumers a variety of funding instruments and facilitate 
variations in state laws. 

First and foremost, we believe that current SSI exclusions for 
funeral and burial funds constitute sound public policy. 

Funeral expenses are inevitable. The cost of a funeral for 
individuals without resources at the time of death is generally 
borne by state and local government programs, unless prepaid 
arrangements have been made. 

The Panel reports it was told repeatedly during hearings that 
SSI benefits are not adequate to provide a dignified quality of 
life. In 1982, Congress recognized that SSI benefits were not 
adequate to provide dignity in death. In recognition of this 
inadequacy, Congress took action to ensure that SSI recipients 
could provide for this necessary final expense via prepaid 
funeral contracts without forfeiting their right to receive 
benefits. 

Current SSI funeral resource exclusions constitute articulated 
public policy on care for the elderly and disabled that 
recognizes as part of that obligation the provision for a 
dignified funeral and burial. 

An overall increase in allowable resources alone would NOT be 
sufficient to ensure the availability of funds for a funeral and 
burial . 

If resource exclusions for funeral and burial funds are not 
maintained, we believe that increased allowable resources will 
likely be used by recipients for day-to-day sustenance purposes, 
without consideration of the need for monetary resources at the 
time of death. 

The continued, formal designation of these funds is necessary to 
ensure that the funds remain intact for the designated purpose 
during the recipient's lifetime. 



117 



m anmtnarv. ve wish to leave vou with two clear messages today; 

First, we oppose any changes that would eliminate current 
resource exclusions for funds set aside for a funeral and 
burial. 

Second, we are the leading national experts on funeral service 
with direct lines of communication to our constituent 
associations in every state and the District of Columbia. He 
ask you to call upon us for assistance as you continue to study 
the complex ramifications of the broad recommendations of the 
SSI Modernization Panel. 

We are an unbiased resource in that we do not favor one funding 
instrument over the other. We believe it is in the best 
interest of funeral directors and consumers to offer the widest 
variety of products and services possible. Current law and 
regulation strikes a delicate balance between all funding 
instruments, and changes could easily tip this market balance in 
favor of one instrument or another. » 

If we do not have information you require, we will get it. If 
members of Congress or the Administration determine that changes 
impacting resource exclusions for funeral and burial funds are 
required for some specific reason, we will develop viable 
proposals with you or for you. 

On behalf of our 15,000 members, thank you for your 
consideration of our concerns. 

We would be happy to address any questions you may have at this 
time. 



118 

Mr. McDermott. Mrs. Boggs. 

STATEMENT OF ELIZABETH M. BOGGS, PH.D., MEMBER, 
GOVERNMENTAL AFFAIRS COMMITTEE, THE ARC 

Ms. Boggs. Thank you. I am here representing The Arc and I 
want to thank the committee for this opportunity. I came down 
from New Jersey today from where I live, and this is now approxi- 
mately my 45th year addressing issues related to the administra- 
tion of the Social Security Act as they affect people with mental re- 
tardation. 

I am a parent of a 48-year-old son who receives adult disabled 
child Social Security benefits in an amount which precludes his re- 
ceiving SSI, but I am very familiar with the problems of determin- 
ing disability and dealing with the Social Security Administration. 

I must say that I find the staff of the Social Security Administra- 
tion exceptionally qualified and considerate, but that I affirm — re- 
affirm what has been said by other witnesses here, that they are 
under great stress at the present time and the understaffing really 
continues to be an acute problem. 

I was appointed to the panel of experts that Dr. Flemming 
chaired and that too gave me considerable insight into the oper- 
ations of the Social Security Administration which I much appre- 
ciate and I was certainly an active participant in the development 
of that report. 

I would like to speak briefly first about people with mental retar- 
dation in the context of SSI because they are a subgroup which has 
some distinctive characteristics. 

First of all, there have been several comments on the change in 
the demographics of the SSI population, and I want to emphasize 
that also. People with mental retardation constitute between 40 
and 50 percent of the children on SSI and 28 percent of all those 
under 65. 

It is often more difficult for the public to visualize the nature of 
the disability that is mental retardation, but like others who have 
other disabilities originating in childhood, people with mental re- 
tardation arrive at the age when they would normally go to work 
with a preexisting condition and they do not arrive at the state of 
becoming disabled with any of the entitlements that go with having 
been in the work force and they have not had the entitlement, if 
you will, of having had a normal education. 

They usually are not married, and in point of fact, the majority, 
although they come in all ages, the majority of the adults with 
mental retardation are between 20 and 40 years of age. They are 
young and many of them are attempting to do some work. The indi- 
cations are that people with mental retardation constitute about 50 
percent of the SSI recipients who are — who are of working age and 
are earning some money, usually under the $500 a month limit. 

I might also add, in terms of the increased number of adults with 
disabilities on SSI, I think it is extremely important to look at the 
reasons for that. Some of the reasons are just plain demographic. 
The group that has grown fastest are the members of the baby 
boom generation, but in addition to that, it has become very clear 
that in the postwar World War II baby boom, we had a higher sur- 
vival rate of children with disabilities. 



119 

In addition to that, we must not forget that the Vietnam veter- 
ans who suffered some disability are also in that adult group and 
many are dependent on either Social Security or SSI. 

I want to speak first to the issue of the resource limits and to 
recommend to you the panel's recommendations for increasing the 
resource limitations from $2,000 to $7,000 for an adult. I would 
have more to say about that, but I want to use what time is left 
to address the issue of trusts. 

This is a complex issue, but it has been addressed iust recently 
by the Congress in relation to Medicaid, and we find that the reso- 
lution which was included in OBRA 1993 (and which was not re- 
ferred to by Mr. Thompson this morning) with respect to the as- 
sets, limitations and the various permissible trust arrangements 
available for people who might need Medicaid can be applied to 
SSI. 

Though we find those OBRA provisions very suitable for the SSI 
picture, it would represent a slight limitation over the existing So- 
cial Security Administration trust policy. That policy has never 
been codified and therefore it is rather hard to grasp hold of it. 

I see that the red light is on and I will discontinue any further 
elaboration of that topic, but the details are given in our written 
statement. 

Mr. McDermott. Thank you. 

[The prepared statement and attachment follow:] 



120 



TESTIMONY OF ELIZABETH M. BOGGS, Ph.D. FOR THE ARC 

COMMITTEE ON WAYS AND MEANS, SUBCOMMITTEE ON HUMAN RESOURCES 

OCTOBER 14, 1993 

INTRODUCTION 

On behalf of The Arc, I want to thank the Ways and Means Subcommittee on Human Resources for 
this opportunity to testify regarding the Supplemental Security Income program. I am a member of the 
national Governmental Affairs Committee of The Arc, as well as a Past President of The Arc and one of its 
founding members. In addition, I had the honor of being appointed by then-Commissioner Gwen King to 
serve on the Panel of Experts advising the SSI Modernization Project. 

The Arc is the largest voluntary organization in the United States devoted solely to the welfare of the 
more than seven million people who are mentally retarded and their families. Its national membership 
numbers over 120,000 people, more than half of whom are parents of children and adults with mental 
retardation, and includes people who are mentally retarded themselves. The Arc has approximately 1,200 
state and local chapters throughout the country. Since its founding in 1950, The Arc has participated actively 
in the formulation of public policy with respect to the rights of, and services for, citizens with mental 
retardation, including public policy concerning the SSI and Social Security disability programs. 

SSI AND PEOPLE WITH MENTAL RETARDATION 

People with mental retardation who are SSI beneficiaries are dependent upon SSI and Medicaid for 
many of their basic needs such as food, shelter, clothing, medical care and long term supports and services. 
Nearly one million children and adults with mental retardation receive SSI benefits. In order to remain 
eligible for the program, they must keep their resources within the established limits. With the erosion of the 
value of the resource limits ($2000 for and individual, $3000 for a couple) over time, this requirement has 
become harsher. While the concept of a resource limit may be necessary to ensure that scarce governmental 
resources are available to serve people in need, the reduced value of the resource limitation increasingly 
places people on the brink of financial collapse. By its very nature, the SSI program provides only a very 
minimal income subsidy which does not even bring people to the federal poverty line. For any type of 
emergency or unexpected expense, SSI beneficiaries must look somewhere other than their SSI benefit check. 
Allowing beneficiaries to maintain a reasonable amount of assets to rely upon when necessary seems not only 
prudent in the long run but also respectful of the dignity of SSI beneficiaries in their attempts to meet their 
own needs. 

The Arc's written testimony will focus on three issues which are the subject of this hearing: the 
recommendations of the SSI Modernization Project's Panel of Experts; treatment of trusts; and the effects of 
the Supreme Court's decision in Sullivan v. Zebley. 

I. SSI MODERNIZATION PANEL RECOMMENDATIONS 

We are pleased to have this opportunity to comment on the Supplemental Security Income 
Modernization Project Final Report, as published in the Federal Register on September 4, 1992. The 
Modernization Project's recommendations to improve the SSI program, through both regulatory and 
legislative changes, have the potential to substantially benefit people with mental retardation who rely upon 
the SSI and Medicaid programs. 

The Arc supports the Project's recommendations as a whole and believes the report could result in 
substantial and far reaching improvements for people who rely on the SSI program due to disability and low 
income and resources. We particularly note the following recommendations as critical to people with mental 
retardation and their families. (Page references are to the Federal Register page (September 4, 1992) on 
which the recommendation is summarized with its estimated cost and to the corresponding page in the Final 
Report, dated August 1992, respectively.): 

1) Need for an Increase in the Federal Benefit Amount (p. 40753/ p. 43) -- A majority of the experts 
recommended an increase over five years in the federal benefit amount to at least 120 percent of the federal 
poverty guideline for an individual. The Arc supports this recommendation. In addition, the panel 
recommended that the benefit rate for couples continue to equal 150 percent of the rate for individuals (as 
opposed to 135 percent of the individual rate). The Arc supports this recommendation; however, we have 
some additional recommendations regarding couples who are disabled, as set out further below. 

2) Elimination of the "1/3 Reduction" Rule and other Counting of In-kind Income (p. 40763/ p. 78) - 
Most of the experts recommended the elimination of the in-kind income rules, including the 1/3 reduction 
rule, because they are "harsh, demeaning, inequitable, an invasion of privacy, subject to manipulation, and 
contrary to principles" of support for the family unit and encouragement of voluntary assistance. The Arc 
supports this recommendation. 

3) Need to Increase the Resource Limits (p. 40763/ p. 78) ~ The Panel of Experts made several 
recommendations regarding resource limits and exclusions. 



121 



A majority of the experts recommended an increase in the allowable resource limits from the current 
$2,000 per individual to $7,000 and from the current $3,000 per couple to $10,500. Included in this 
recommendation is elimination of some current exclusions, such as a burial fund, since the higher resource 
limits would provide ample room to absorb those funds. Certain resources would still be excluded (not 
counted) within the resource limits: the home, an essential car, business property essential for self-support, 
and household goods and personal effects. The Arc supports this recommendation and urges the 
Subcommittee to consider and report legislation to accomplish this goal. In addition, The Arc believes that 
the resource limits must be indexed for inflation to avoid the enormous erosion in value seen in the limits in 
the past. 

As discussed further below in Section n, "Treatment of Trusts", there have been recent and 
significant developments in the treatment of trusts for purposes of Medicaid. We believe that any changes in 
the treatment of trusts for SSI purposes should be in line with the recent Medicaid changes in the Omnibus 
Budget Reconciliation Act of 1993. Therefore, we do not support the Modernization Panel's specific 
recommendations regarding treatment of trusts where the source of the funds is the individual or a judgement 
payment or settlement of a suit. 

The Arc also supports the following recommendations regarding resources of the SSI Modernization 
Project: 

o In determining the amount of resources to be deemed from a parent(s) to a child, exclude 

$2000 for each ineligible child in the household. 

o Change the method for calculating overpayments that result from excess resources. The 

amount of an overpayment resulting from excess resources would not be greater than the 
maximum amount that the person's resources exceeded the resources limit. 

o Change the current periods for the time-limited exclusions to 12 months. 

4) Need to Increase Social Security Administration Staffing (p. 40781/ p. 145) - All of the experts who 
took a position on the lack of adequate staffing for the Social Security Administration agreed that an increase 
in the administrative budget to increase the number of staff and related support is a top priority. An 
immediate increase of 6,000 positions is recommended as a reasonable first step toward alleviating the 
shortages. The Arc supports this recommendation. 

5) Need to Re-examine the Definition of Disability and SGA (p. 40770/ p. 104) - In addressing the 
issue of work incentives, a majority of the Panel recognized the possible need to look more globally at what 
constitutes disability rather than to limit the concept of disability solely to the realm of work and substantial 
earnings. Therefore, a majority of the Panel recommended a change in the definition of substantial gainful 
activity (SGA) to recognize that people who are working with substantial supports are not performing SGA 
and are therefore still disabled. The Panel further recommended a study of the feasibility of eliminating the 
use of SGA in the Social Security disability programs, including SSI, and developing criteria in terms of 
being disadvantaged in major areas of life activity, including, but not limited to, work. The Arc supports 
these recommendations. 

6) Improvement of Work Incentives (p. 40771/ p. 106) - A number of work incentive issues were 
examined by the Panel and recommendations were made to do the following: increase the earned income 
disregard to $200 (from $65) plus two-thirds of the remaining (currently one-half of the remaining) and 
eliminate the regulatory time limit for completing a plan for achieving self-support (PASS). The Arc 
supports these recommendations. 

7) Improvements in Provisions Affecting Children (p. 40762, 40763, and 40771/ p. 76-80, 105) - 
While many of the majority's recommendations will positively affect children, there are several which will 
have a particularly beneficial impact. They include recommendations: to allow parents to deduct the special 
expenses of a child with disabilities from their income before determining "countable" income; to recognize 
parental obligations to support other children in the family by providing a resource allocation of $2,000 per 
"ineligible" child when calculating the amount of parental resources remaining for the support of the child 
with disabilities; and to have the Social Security Administration develop criteria for a presumption of 
disability for children up to age four who are difficult to test or diagnose. The Arc supports these 
recommendations. 

8) Automatic Medicaid Eligibility (p. 40784/ p. 157) - The majority of experts recommended that 
"anyone who is eligible for SSI should have Medicaid coverage as part of a total benefit package" and that 
the coverage should be automatic. The Arc supports these recommendations. 

9) Time Limits on Claims and Appeals (p. 40771/ p. 105-106) -- A majority of the experts 
recommended establishing a 90-day time limit on initial decisions on disability claims and on administrative 
appeals. If the agency did not issue a decision within the time limit, benefits would automatically begin. If 
it was later determined that the individual did not meet disability criteria, the benefits paid would not be 
treated as "overpayments" subject to reimbursement by the recipient. The Arc supports this 
recommendation. 



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While The Arc is supportive of the recommendations of the SSI Modernization Project as a whole, we 
believe the following areas need further exploration and work: 

o Substantial Gainful Activity (SGA^ - While The Arc supports the Project's recommendations 

regarding SGA (see number 5 above) as a step in the right direction, the recommendation does not go as far 
The Arc believes it should. The Arc believes that legislation should be enacted to remove the current concept 
of SGA from the definition of disability and replace it with an assessment of functional limitations in all areas 
of life activities. Interim steps to achieving that goal would include (a) an immediate increase in the SGA 
level to the same level as that for persons who are blind, indexing that level to average wage growth in future 
years, and (b) immediate elimination of the use SGA for initial eligibility in the SSI program, thus achieving 
consistency with treatment of people who are blind. The Arc supports the concepts submitted by Elizabeth 
M. Boggs (Chapter IV, Appendix ii, "Definition of Disability") and appreciates the majority's 
recommendation for a study along those lines. 

o Representative Payment Issues (p, 40782/ p. 149) - While The Arc generally supports the 
recommendations of the Project regarding representative payee issues, we have several concerns which we 
believe must be addressed before these recommendations are acted upon. 

Regarding the Project's recommendation to strengthen the recruitment, monitoring, and training of 
payees, we believe care must be taken to balance legitimate concerns regarding accountability with concern 
for preservation of the viability of family members serving as payees. Monitoring tasks for family members 
should not become so burdensome as to discourage their participation as representative payees. 

Second, while we believe it is important to authorize qualified non-profit organizations to be 
reimbursed for costs for service as payees and for such fees to be paid out of administrative funds (rather than 
recipients' benefits), we believe that the payee should be responsible to the beneficiary and not function as a 
contractor or employee of the Social Security Administration. The discussion and recommendation on this 
point is unclear in the final report and The Arc has strong reservations about establishing any SSA 
contractor/employee relationship in these representative payment situations. 

In addition to the above noted concerns regarding the Modernization Panel's recommendations, The 
Arc is also concerned about the current temporary authority for non-profit organizations to receive a fee for 
performing representative payee duties. 

About 80 percent of people with disabilities originating in childhood who are receiving SSI or "adult 
disabled child's" (DAC) benefits under Titles II or XVI have representative payees. The people in need are 
diverse, ranging from those who just don't know how to keep track of their bills so that their utilities are not 
turned off, to those who could squander their money wildly or are quite unaware of what money is used for. 
We consider representative payee services as a form of personal assistance for people with cognitive 
impairments, and would like to see this form of service eventually incorporated in a long term services 
agenda. 

As with other forms of personal assistance, much can and is provided informally and without payment 
by friends and family members of individuals with impairments. In choosing payees, SSA properly gives 
priority to family members and, for the most part, finds that such appointees combine the desired functions of 
being accountable for the recipient's benefits while using common sense about what is personally pleasing 
and beneficial to the particular person whose money it is. As mentioned in our oral testimony, people with 
mental retardation and other disabilities originating in childhood are living longer and now more frequently 
survive their parents. At the same time, SSA is finding it increasingly difficult to find suitable payees for 
individuals who do not have family members able to perform this function. 

Various initiatives are underway, including an attractive program sponsored by AARP which is 
recruiting some of its own members as volunteers to serve on a senior-to-senior basis. Such a program is 
promising but not without costs and not all recipients can be appropriately served by volunteers. Like SSA, 
The Arc is concerned with people who have diverse needs. For this reason state chapters of The Arc have 
become increasingly active in trying to assure that someone will be "there" for the adult son or daughter 
when parents are no longer able. A community based organization with expertise in protective services can 
offer an additional alternative. 

Section 205(j) of the Act was amended effectively July 1, 1991 to provide SSA with another option 
that can address some problem cases — the option of choosing as payee a suitable non-profit social service 
organization which is not otherwise being paid to deliver services to the SSI recipient who needs a payee. It 
permits the organization to collect a small fee to cover the costs of its administration. This amendment 
sunsets next July. The original sponsors of this amendment are, we understand, proposing to extend this 
provision for another 3 years, with modifications. We support this extension. 

Some people have criticized the concept because the fee is taken out of the recipient's benefit, which 
is already meager. The SSI Modernization experts recommended that the costs (which may not exceed $25 a 
month) be paid out of SSA's administrative budget. SSA has been adamantly opposed to this suggestion. 
While we share the view that any reduction in the benefit on an individual is to be deplored, we find that it is 



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better to have the slightly reduced sum efficiently expended in a personalized way than to have the full 
benefit check less wisely spent. The 205(j)(4)(A) arrangement may not be ideal, but should remain as an 
option. 

o Treatment of Married Couples — In SSA parlance a "couple" is a "unit" in which the spouses are each 
categorically eligible on the basis of age, disability or blindness, and have combined countable income and 
assets that do not exceed 150% of the amounts allowed to an individual; in computing the countable income 
and assets the law allows exclusions to the "unit" which do not exceed those allowed to a single person (e.g., 
one set of earned income disregards, one $20 unearned income disregard (exclusion), one automobile, one 
burial fund etc.). 

If a categorically eligible individual is married to an ineligible spouse, the individual may be eligible 
as an individual; if the spouse has countable income in excess of 50% of the Federal benefit rate for a single 
person (FBR-S), the excess income is "deemed" to the categorically eligible individual. This deemed income 
excludes income earned by the ineligible spouse to the same extent that income earned by a person with a 
disability can be excluded or disregarded (i.e. the first $65 plus half the excess over $65). The recipient who 
is disabled can also take similar exclusions on any income he or she may earn. When income deemed from 
the ineligible spouse, combined with any countable income that the individual may have, exceeds 150% of 
FBR-S, SSI payments will cease. If the partner with a disability has no earnings or other income, the 
ineligible spouse may earn up to $1,380 a month (in 1993) before causing the partner's SSI eligibility to be 
terminated. 

The standard rationale for paying an eligible couple based on 150% of the "single" rate is that it 
reflects the well established paradigm of the Social Security retirement benefit where a non-working spouse 
receives a benefit based on 50% of the retired worker's PIA (primary insurance amount). This model does 
not take into account the changes that have taken place in the last thirty years during which an increasing 
number of married women have acquired entitlements to Social Security benefits based on their own 
earnings. These benefits are unaffected by marital status. Even where a widow's or adult child's benefit is 
payable, marriage to another Social Security beneficiary does not diminish the benefit. This includes the 
marriage of two adults who receive benefits as adults disabled during childhood (DAC); benefits are not 
reduced for either party. This pattern is not followed by SSI, however, with results that are particularly 
bizarre where one or both members of a "couple" wish to attempt to work despite severe disability. 

The following excerpts are taken from an Office of Supplemental Security Income summary document 
on "couples" dated November, 1991. It was provided to the experts following the series of public hearings 
conducted by the experts in major cities. 

Many commenters agreed that the SSA rules relating to couples are often punitive and archaic. They 
are based on outdated concepts which SSA and IRS have been trying to move away from. They 
said that low income people should not be penalized financially for wanting to enter into a living 
arrangement with another person as that person's spouse or otherwise. Each person should be allowed 
to maintain his or her own exclusions, as well as an individual benefit standard. They emphasized 
that it is simply not true that two people can live as cheaply as one. 

While these claims may overstate the case, I can affirm that these concerns are real, because they were 
powerfully expressed at the hearing in Atlanta which I attended. In addition, we hear these complaints 
directly from young adults who have been disabled since childhood, and who constitute the major portion of 
SSI adult recipients who are under 45. These are also the SSI recipients who are most likely to try to work, 
using the work incentives that this Committee has, to its credit, authorized in recent years. 

A major concern to these young adults is what happens if they marry another person with a disability 
who is also eligible for SSI. Under present conditions they will clearly be disadvantaged, both relative to 
persons who have non-disabled spouses, and relative to single recipients with disabilities who also share 
housing (e.g., with other disabled family members or friends). These young adults are also well aware that, 
as mentioned above, when two adults each receive SSDI or DAC benefits based on their own disabilities, 
their benefits are personal to each and are unaffected by their marital status. 

Although deeming rules can be altered at the discretion of the Secretary, the treatment of a "couple" 
as a single eligibility unit with only one set of disregards is mandated by the language used in Section 
1612(b). 

As mentioned earlier, we favor a general increase in the assets limits for both individuals and couples; 
if this recommendation of the experts is effected we see no need for special exceptions. If, however, the 
Committee chooses to keep the burial fund exclusion, we urge you to allow for an exclusion for each eligible 
member of a couple. 

The Experts recommended that the law be changed to allow appropriate income and asset 
exclusions, including earned income disregards, for each eligible individual who is part of a "couple". 
We urge this Committee to implement this recommendation without delay. 



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In addition to recommending a fairer approach to exclusions from income, many of the experts were 
eager to provide an augmented benefit for married couples where both have disabilities; such couples clearly 
have living expenses which exceed those normally experienced by their age peers. The suggestion most often 
discussed was that each member of a couple retain his or her individual entitlement. The Arc would support 
that approach. However, it was pointed out that this construct might disadvantage some couples, usually 
those in the age range 55-64 who are making a transition to retirement. In the end, the majority of experts 
were dissuaded by economic arguments and cost estimates based on the assumption that all couples should be 
treated in the same way regardless of age. At the time this subject came up for reconsideration, it was too 
late to search out a more detailed analysis which recognizes a number of realities that were not taken into 
account in the debate. 

When one considers the particular case of people who become disabled before a first marriage and 
where a couple may be formed in which both members are disabled, one can focus on a small but especially 
disadvantaged constituency, which, if separated out, can also be treated more fairly at relatively little cost. 
The following table shows how the estimated 717,000 people who were married SSI recipients in 1990 were 
distributed by age and status: 

MARRIED ADULTS RECEIVING SSI BY AGE, IN 1990 (in thousands) 

as couples with ineligible spouse 

Age 

18-55 19 225 

55-64 66 92 

65 + 213 102 

Totals 298 419 

(149 couples) 

(Source: Social Security Bulletin Annual Statistical Supplement 1993, Table 7.A7.) 

When considering the situation of the 9,500 young couples (19,000 individuals) under 55 listed above, 
there are several factors that should be taken into account, beginning with the issue of cost of living for non 
aged adults with disabilities. 

The Committee is undoubtedly aware that the formula for computing the poverty level is distincdy out 
of date, in that the relative importance of food and shelter as respective cost factors for individuals and 
families have changed substantially since the poverty formula was first devised in the early sixties. In any 
case the poverty level ordinarily used in discussing SSI (without regard to age) — and used in the Project by 
the expert economists - is the one applicable to "elderly households". Under the formula the FBR for 
individuals has hovered around 75 percent of poverty while that for couples has come close to 90 percent. 
(See Green Book, pp. 836-7); however, when (higher) poverty thresholds as computed for householders 
under age 65 are used, the ratio of the FBR to poverty thresholds are distinctly lower, e.g., 69 percent for an 
individual and 80 percent for a couple under age 65 (Social Security Bulletin, Annual Statistical Supplement, 
1993, Table 3. El; see also Table 2, in Relative Benefit Levels and Benefit Adequacy in the Supplemental 
Security Income Program prepared for the SSI Modernization Project by Steve Bartolomei-Hill and Daniel R. 
Meyer of the Office of Human Services Policy of the U.S. Department of Health and Human Services). 

It is clear, of course, that for most persons with disabilities, there are further costs of maintaining 
even a minimally adequate life style as compared to those incurred by an "average" individual or married 
couple of working age, even if one looks only at food, clothing, shelter and transportation. In recent years, 
SSI recipients who work have been permitted to deduct impairment related work expenses from their 
countable earned income but these computations do not extend to similarly essential expenses that are not 
considered "work related." 

Many indexes point to a significant distinction between those current recipients who are under 50 and 
those over 55. The vast majority who are taking advantage of the Section 1619 work incentives are in the 
younger age groups; on the other hand, most of the "couples" are over 55. Of some 4 million adults now 
receiving Federal SSI payments, only about 21,000 — half of 1 percent (but up 14 percent since 1990) - are 
under 55 and married to other recipients. We do not know how many of these became disabled after being 
married. We do know that some of those in the same age group, who already receive benefits as individuals 
who are disabled, would like to marry but are deterred by the prospective loss of income. Recognizing that 
there are some economies associated with a marriage even where both spouses are disabled, but also 
recognizing the problems associated with early disability, we propose providing couples with double the 
individual rate, or, if that approach is not feasible at this time, we propose the following conservative 
initiative as a way of probing the problem further. 

Specifically, we recommend , as an initial step, that for marriages between two individuals who 
are under 55 at time of marriage and who both have been disabled since before the marriage, the FBR 
for a couple be raised to 175% of the FBR for a single individual. 



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This still keeps the couple with disabilities below the poverty level for other couples of the same age; 
maintaining this rate as the couple ages recognizes the disadvantages they will continue to experience as a 
result of the relatively early age of onset of their disabilities. This recommendation could be implemented for 
a cost of about $14 million annually if eligibility is not made retroactive for those now over 55. If eligible 
individuals who are now single are motivated to marry, corresponding savings may be achieved. 

Again, The Arc appreciates this opportunity to comment on the excellent work of the SSI 
Modernization Project. The Arc believes that, as a whole, the work and recommendations of the SSI 
Modernization Project were excellent and timely and that the recommendations should be implemented as 
soon as possible. We urge the Subcommittee to give serious consideration to the entire report. The Arc is 
committed to working with the Social Security Administration and the Congress to achieve the long overdue 
improvements in SSI as outlined by the SSI Modernization Panel. 

II. TREATMENT OF TRUSTS 

In general, current policy for treatment of trusts in the SSI program has worked well, and has been 
widely relied on by families and attorneys, although at present it exists only as Social Security Administration 
interpretation of SSA regulations. There have been some criticisms of the ways in which "windfall" assets 
that belong to the SSI recipient may be handled in trusts; these concerns as they arise in relation to Medicaid 
were addressed earlier this year in OBRA '93. The Arc believes that, with comparable revisions as 
indicated, SSA's present policies on trusts should be codified to make them more visible, citable, durable, 
and reliable. 

The issue of treatment of trust assets and income as standby and auxiliary resources for individuals 
disabled by mental retardation is a very important one for The Arc, many of whose members are parents of 
people with mental retardation or related disabilities. Like other parents, they are not legally liable for the 
support of their adult sons and daughters; yet they recognize that SSI barely covers the cost of food, shelter, 
and clothing, and that Medicaid may also fall short of meeting all health care and long term service needs. 
During the life of the parent, the parent may supplement these basic entitlements by paying for such things as 
telephone service, transportation, personal assistance, recreation, and other social or educational services that 
are not covered by state or charitable agencies. In order to maintain these options for an adult with mental 
retardation after the death of the parent, parents seek to create durable trusts that do not jeopardize the basic 
benefits of Title XVI and XIX. 

For these reasons we seek codification of the SSA policy on trusts, modified to track the action 
taken by Congress in the Omnibus Budget Reconciliation Act of 1993 regarding treatment of trusts 
under Medicaid. 

Under current SSI policy, assets in trust are treated according to the basic rules regarding the 
definition of resources and which resources will be counted for purposes of determining eligibility. If the 
individual owns the funds in the trust and can legally access the trust to use the money for self-support, then 
the trust assets are considered as available resources. If, on the other hand, the person cannot legally access 
the funds, then the trust assets are not counted as resources. This policy for applying the rules allows third 
parties, such as parents and other family members, to set aside funds in trust for the benefit of an SSI eligible 
individual without negatively affecting the individual's eligibility for SSI. In addition, income and assets 
paid out from the trust are treated in the same way as payments from any third party. If cash is given 
directly to the individual, then SSI benefit amounts, and possibly even eligibility, are affected. If, on the 
other hand, payments are made to someone else for goods or services to benefit the individual (other than 
food, clothing, or shelter), then SSI benefits and eligibility are not affected. Such goods and services may 
include, for example, social services, rehabilitation services, educational supplies and services, ongoing 
monitoring or advocacy services, or other items not covered by SSI or Medicaid. 

RECENT CHANGES IN MEDICAID 

OBRA '93 included some major changes in the Medicaid treatment of assets, transfers of assets, and 
recovery of Medicaid expenditures from estates of deceased Medicaid beneficiaries. While the overall 
package of amendments establish stricter requirements for transfers of assets and establishment of trusts and 
harsher penalties for the average person applying for Medicaid coverage of nursing home costs, these changes 
are important improvements to Medicaid treatment of trusts from the perspective of families of people with 
mental retardation. The amendments affect only the Medicaid eligibility of the person who owned the assets 
before transferring them (below market value) or placing them into trust. Special exemptions were included 
for: 

o transfers by a parent to a child who is disabled (regardless of age) or transfers by a parent to a 

trust for the benefit of a child who is disabled (regardless of age); and 

o transfers to a trust (including a pooled trust) established for the benefit of a person who is 

disabled and under the age of 65. This provision is new and will allow other family members 
(and others, generally) to contribute to a trust for a person who is disabled while protecting the 
potential Medicaid eligibility of the person who transferred the funds. 



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These Medicaid provisions were silent on the question of the Medicaid eligibility of the individual who is 
disabled. The presumption is that the trusts will be treated as under current SSI policy (only cash payments 
from the trust directly to the individual will affect SSI benefits or eligibility). 

In addition, OBRA '93 added protections for the individual with a disability who places his/her own 
assets in trust. This approach will be especially useful in situations where the individual receives an SSI back 
payment award (including Zebley class members) or receives payment in judgement or settlement of a 
personal injury suit. The individual's own Medicaid eligibility is protected when funds are transferred to a 
trust: 

o when the trust is established for the individual's benefit where the individual is under 65 and 

the trust is set up by a parent, grandparent, legal guardian, or a court; or 

o when an individual account is created within a pooled trust established and managed by a non- 

profit organization and where the funds are placed in trust by the individual, parent, 
grandparent, legal guardian, or a court. 

In both cases, the amounts remaining in the trust upon the individual's death must be paid to the state up to 
the amount expended on Medicaid services. In the case of the pooled trust, the amount paid to the state for 
Medicaid will be subject to any agreed upon amount or percentage of remaining funds which must be paid to 
the general pooled trust funds, as determined by the trust agreement. (There is a third provision, with similar 
remainder requirements, which allows placement of pension and Social Security income into trusts for 
nursing home residents in certain states.) 

These are important improvements in the law regarding trust assets for purposes of Medicaid 
eligibility for people with mental retardation. We believe that, rather than adopting the Modernization 
Project Panel's recommendation to count trust assets which belong to the individual or result from a 
settlement or a judgement, SSI law should be made parallel to the Medicaid amendments so that people are 
not penalized for actions in one program which are legitimate in the other program. In addition, the 
provisions for remaining amounts going to the state would seem to address any issues about people with their 
own resources being allowed to remain in the SSI program: funds could be used to supplement SSI and 
Medicaid during life while state Medicaid programs are reimbursed for services to the extent possible from 
such funds remaining at death. We recognize that this will result in some tightening of the current SSI 
approach. 

Given the statutory clarification and improvements in Medicaid treatment of trusts, The Arc believes 
that it is time to codify the SSI policies regarding treatment of trusts. Codification should allow parents, 
family members, and others to more securely rely on the rules for making arrangements, which will last long 
after the parent (or other) is no longer living, to benefit an individual with disabilities who needs on-going 
assistance. 

m. THE EFFECT OF THE SUPREME COURT'S DECISION IN SULLIVAN V. ZEBLEY 

The Arc believes that it is important to view the developments stemming from the Zebley case, the 
subsequent revised childhood disability criteria, and the revised childhood mental impairment regulations in 
historical context with an understanding of the problems which existed prior to these major developments. 
Essentially, it must be remembered that the U.S. Supreme Court issued a landmark opinion in the case of 
Sullivan v. Zebley on the basis of the finding that the Social Security Administration's (SSA) regulations 
regarding childhood disability criteria were inconsistent with the law. 

Title XVI of the Social Security Act authorizes payment of Supplemental Security Income (SSI) 
benefits to children who have an impairments of "comparable severity" to one that would be considered 
disabling for an adult. Under the Social Security Act, an adult is considered disabled, and therefore eligible 
for SSI benefits if, in addition to meeting income and resource criteria, he or she has an impairment that 
prevents him or her from engaging in any substantial gainful activity (SGA). SSA has a five-part test for 
determining disability for adults. The third step allows a person to be considered disabled if medical 
evidence of the impairments matches or is equal to ("meets or equals") one of the listings of impairments [20 
CFR 404, Subpart P, Appendix 1], which are presumed to be severe enough to preclude any gainful activity. 
If the adult does not qualify for SSI benefits at that step, steps four and five are designed to allow a 
vocational analysis to determine whether the adult could engage in his or her past work or any other work 
given his or here education and work experience. 

Prior to the Zebley decision, the determination of disability for children ended at the listings of 
impairments step. To be determined disabled, a child had to show that his or her impairment matched or was 
equal to one of the listed adult or childhood impairments. If the child could not make such a showing, there 
was no step in the childhood disability determination process comparable to the vocational assessment for 
adults. The child was simply found to be not disabled for purposes of the SSI program. 

The Sullivan v. Zebley case was a class action suit on behalf of Brian Zebley, two other named 
plaintiffs, and all individuals "who are now, or who in the future will be entitled to an administrative 



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determination ... as to whether supplemental security income benefits are payable on account of a child who 
is disabled, or as to whether such benefits have been improperly denied, or improperly terminated, or should 
be resumed". In a 7-2 decision written by Justice Blackmun, the Supreme Court ruled that the childhood 
disability regulations were inconsistent with the statutory standard of "comparable severity." The Court 
found that failure to provide for an individualized functional analysis for children nullified Congressional 
intent to link the childhood disabilities criteria to the adult criteria. The Court went on to state: 

The fact that vocational analysis is inapplicable to children does not mean that a functional analysis 
cannot be applied to them. An inquiry into the impact of an impairment on the normal daily activities 
of a child of the claimant's age-speaking, walking, washing, dressing and feeding oneself, going to 
school, playing, etc. -is, in our view, no more amorphous or unmanageable than an inquiry into the 
impact of an adult's impairment on his ability to perform any other kind of substantial gainful work 
which exists in the national economy". 

The Court also noted that childhood disability listings were not exhaustive and included only the more 
common impairments: "There are, as yet, no specific listings for many well-known childhood impairments, 
including spina bifida, Down's syndrome, muscular dystrophy, autism, AIDS, infant drug dependency and 
fetal alcohol syndrome. 

The judicial resolution of this issue came after years of effort by many advocacy organizations in the 
courts, in Congress, and through SSA to correct the failure of the regulations to correctly deal with childhood 
disability. 

In 1990, SSA appointed a panel of experts in child development and childhood disability to help the 
agency develop criteria for determining disability based on an individualized functional assessment. The 
experts represented a wide range of areas: general pediatrics, developmental genetics, developmental 
pediatrics, infant development, behavioral pediatrics, pediatric psychology, pediatric neurology, child 
psychology, pediatric special education, home and community care, family and support systems, physical and 
occupational deficits, early childhood education, pediatric rehabilitation, learning disorders, chronic illness 
and somatics, and communication disorders. 

New regulations for determining childhood disability on the basis of functional limitations were 
published by SSA and were immediately effective on February 11, 1991 as interim final regulations. Final 
regulations were published on September 9, 1993. 

Under the regulations, provision is made to conduct an individualized functional assessment, which 
incorporates all relevant past and present medical and nonmedical evidence in a child's case records. 
Evidence from people who know the child and his or her functional limitations, in addition to the evidence 
provided by doctors and other health professionals, is strongly encouraged. Information about the child from 
parents, other family members, caregivers, educators, and practitioners in other disciplines should be 
collected. Where discrepancies exist between formal test results and the child's usual behavior and daily 
activities, SSA encourages the documentation and resolution of discrepancies. The evaluation of a child's 
development or functioning from infancy through childhood to maturation into adulthood may include his or 
her cognitive communicative, motor, social and personal/behavioral spheres of activity. The evaluation may 
further address responsiveness to stimuli (in children from birth to age one); personal/behavioral patterns (in 
children from one to 18); and concentration, persistence, and pace in completion of tasks (in children from 
three to 18). The evaluation also seeks to determine the extent to which the child can engage in sustained 
activities appropriate to his or her age. 

In reviewing the current status of childhood disability determination, it should also be noted that SSA 
took one other critical action in the early "90s. On December 12, 1990, new regulations or "listings" for 
determining disability for children based on mental disorders (or impairments) and a new listing for 
disabilities based on Down syndrome or other serious hereditary, congenital, or acquired disorders. This was 
a result of work initiated by SSA years before the Zebley decision, but is integral to the effectiveness of SSA 
in its response to the Zebley decision. These regulations were effective immediately. 

The childhood mental impairments listings were substantially revised and took into account the child's 
age. The listings improved the criteria for determining who is disabled based on mental impairments before 
the need for a full individualized functional assessment, while, in fact, including some new functional 
assessment criteria at the listings level. The listings cover the following: mental retardation; psychoactive 
substance dependence disorders; autistic and other pervasive developmental disorders; attention deficit 
hyperactivity disorders; developmental and emotional disorders of newborn and younger infants (birth to age 
one); organic mental disorders; schizophrenic delusional, and other psychotic disorders; mood disorders; 
anxiety disorders; somatoform, eating, and tic disorders; and personality disorders. 

In the preamble to the new Down syndrome rules, SSA indicated that experience showed that virtually 
all children with Down syndrome (except Mosaic Down syndrome) would be found disabled when the effects 
of their impairments could be properly documented and evaluated. Therefore, the new rules allow children 
whose Down syndrome has been established by clinical and laboratory findings to be considered disabled 
from birth without waiting until such time as functional limitations could be proven. 



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Finally, the new listings for multiple body dysfunction due to hereditary, congenital, or acquired 
conditions should also be of benefit to many children who would have more difficulty establishing disability 
under the old rules. This listing may be used to determine disability resulting from phenylketonuria (PKU); 
fetal alcohol syndrome; mental retardation with known causes associated with impairments of other body 
systems; and other impairments. 

The ultimate impact of the Zebley decision will depend on the commitment and dedication of many 
family members, advocates, and professionals, including teachers and other school system personnel. SSA's 
new efforts to collect information from such sources will mean that such people will play pivotal roles in just 
how many potentially eligible children and class members eventually will receive benefits. 

In a nutshell, the final rules for childhood disability determination in response to the Zebley decision, 
the childhood mental impairment regulations, and the regulations for Down syndrome and other serious 
hereditary, congenital, or acquired disorders were the result of much careful deliberation over the course of 
several years and involving numerous experts on child development and disability. While there may be 
problems here and there, overall the new regulations are a tremendous improvement for children and long 
overdue. As we approach the 20-year mark for the SSI program, children are just now beginning to receive 
the consideration of their disabilities which should have occurred from the beginning of the program. With 
such a long delay in implementation of the original intent of the program, it is no wonder that the numbers of 
children becoming eligible for the program are increasing rapidly. The dramatic increase in the numbers of 
eligible children must be seen in historical context and must not be allowed to serve as the basis for 
inappropriate cutbacks. 

Further, where there are problems, resolutions must be carefully and surgically crafted to ensure that 
they are not overreaching in effect. Frankly, we believe that many of the "problems" which have been 
reported are the result of misunderstandings of the SSI program, generally, and of the process for 
determining childhood disability, specifically. Where instances of abuse or exploitation are reported, proper 
avenues for redress exist in the state child protective services systems and within the SSA representative 
payee system. In addition, we understand that SSA is engaged in a thorough internal study of the application 
of the regulations and, as particular problems are noted, is taking immediate steps to resolve the issues. We 
believe that most legitimate issues can be handled in this manner. We would, of course, be willing to work 
with the Subcommittee to deal with those few areas where statutory solutions are necessary. 

The Arc endorses the main points made in the oral and written testimony of Richard Weishaupt of 
Community Legal Services and the testimony for the record of Rhoda Schulringer and Joseph Manes of the 
Bazelon Center for Mental Health Law. Both organizations have extensive experience in working directly 
with SSI beneficiaries and their families. In addition, for further information on the history of the Zebley 
decision, the childhood disability regulations, and the childhood mental and other related disability 
regulations, see "Expanding Eligibility for Supplemental Security Income Based on Childhood Disability: 
The Zebley Decision", Ford and Schwamm, Child Welfare . July-August, 1992 (copy enclosed for Committee 
files). 

Again, The Arc appreciates the opportunity to comment on the above issues and looks forward to 
working with the Subcommittee to enact improvements to the SSI program. If you have any questions on the 
above, please contact Marty Ford at The Arc Governmental Affairs Office, (202) 785-3388. 



129 



Expanding Eligibility for 

Supplemental Security Income 

Based on Childhood Disability: 

The Zebley Decision 



MARTHA E. FORD 
JEFFREY B. SCHWAMM 



Thousands of low-income children have been denied 

disability benefits due to an invalid childhood disability 

determination process. This changed when the United 

States Supreme Court issued its decision in the case of 

Sullivan v. Zebley. The authors review the Zebley 

decision and the response by the Social Security 

Administration, present the new regulations for 

determining childhood disability, and discuss implications 

for child advocates, service providers, and social work 

educators to implement successfully the new 

federal regulations. 



On February 20, 1990, the U.S. Supreme Court issued a landmark finding 
in the case of Sullivan v. Zebley that the Social Security Administration's 
(SSA) regulations regarding childhood disability criteria were inconsistent 
with the law. A major victory for low-income children with disabilities, the 

Martha E. Ford, J.D., is Assistant Director, Association for Retarded Citizens of the 
United States, Governmental Affairs Office, Washington, DC. Jeffrey B. Schwamm, 
Ph.D., is Associate Professor, Department of Human Services, Social Work Program, 
George Mason University, Fairfax, VA. The authors wish to acknowledge the Asso- 
ciation for Retarded Citizens of the United States for permission to use portions of 
editions of its Government Report, which was written by the first author. Special 
thanks to Paul Marchand, Director, ARC Governmental Affairs Office, for reviewing 
the manuscript. 



130 



Court's decision will make it possible for over 400,000 children to have their 
cases reviewed and, if eligibility is found to have been improperly denied 
since 1980, to receive retroactive benefits ("Children to Get . . ." 1991]. In 
addition, based on new regulations published in response to the Zebley de- 
cision, 38,000 more applicants in each of fiscal years '9 1 and '92 are expected 
to receive Supplemental Security Income (SSI) benefits that they otherwise 
would have been denied. The five-year projection is at least 159,000 [Federal 
Register 1991). 

This article describes the Zebley decision, its history, and the Social Security 
Administration's response. It focuses particularly on the new regulations for 
determining childhood disability and the U.S. District Court's final order to 
resolve all outstanding issues related to the Zebley decision, and concludes 
with implications for child advocates, service providers, and social work 
educators, all of whom are vital to a successful outcome. 



Background 

Title XVI of the Social Security Act authorizes payment of Supplemental 
Security Income (SSI) benefits to children who have an impairment of "com- 
parable severity" to one that would be considered disabling for an adult. 
Under the Social Security Act, an adult is considered disabled, and therefore 
eligible for SSI benefits, if, in addition to meeting income and resource 
criteria, he or she has an impairment that prevents him or her from engaging 
in any substantial gainful activity (SGA).* SSA has a five-part test for de- 
termining disability for adults. The third step allows a person to be considered 
disabled if medical evidence of the impairment meets or is equal to one of 
the listings of impairments [20 CFR 404, Subpart P, Appendix I], which are 
presumed to be severe enough to preclude any gainful activity. If the adult 
does not qualify for SSI benefits at that step, steps four and five are designed 
to allow a vocational analysis to determine whether the adult could engage 
in his or her past work or any other work given his or her education and work 
experience [Supreme Court of the United States 1990). 

Prior to the Zebley decision, the determination of disability for children 
ended at the listings of impairments. To be determined disabled, a child had 
to show that his or her impairment matched or was equal to one of the listed 
adult or childhood impairments. If the child could not make such a showing, 



*The SGA level is generally defined by a monthly earnings limit, currently S500 per month, 
although other factors are also taken into account in determining whether work is considered 
substantial and gainful. 



131 



there was no step in the childhood disability determination process comparable 
to the vocational assessment for adults. The child was simply found to be not 
disabled for purposes of the SSI program [Supreme Court of the United States 
1988]. 

The Sullivan v. Zebley case, which began in Pennsylvania, was a class 
action suit on behalf of Brian Zebley, two other named plaintiffs, and all 
individuals "who are now, or who in the future will be entitled to an ad- 
ministrative determination ... as to whether supplemental security income 
benefits are payable on account of a child who is disabled, or as to whether 
such benefits have been improperly denied, or improperly terminated, or 
should be resumed" [Sullivan v. Zebley 1990]. The district court found in 
favor of the Secretary of Health and Human Services, noting that the regu- 
lations were not invalid or incomplete as written. The Court of Appeals for 
the Third Circuit, however, found in favor of the Zebley class, ruling the 
regulatory scheme for childhood disability determinations invalid because the 
listings-only approach failed to take into account all impairments of "com- 
parable severity" and denied children the individualized functional assessment 
that the statute required for adults [Sullivan v. Zebley 1988]. 

In a 7-2 decision written by Justice Blackmun, the U.S. Supreme Court 
ruled that the childhood disability regulations were inconsistent with the sta- 
tutory standard of "comparable severity." The Court found that failure to 
provide for an individualized functional analysis for children nullified congres- 
sional intent to link the childhood disabilities criteria to the adult criteria 
[Sullivan v. Zebley 1990]. The Court went on to state: 

The fact that vocational analysis is inapplicable to children does not 
mean that a functional analysis cannot be applied to them. An 
inquiry into the impact of an impairment on the normal daily ac- 
tivities of a child of the claimant's age — speaking, walking, wash- 
ing, dressing and feeding oneself, going to school, playing, etc. — 
is, in our view, no more amorphous or unmanageable than an inquiry 
into the impact of an adult's impairment on his ability to perform 
any other kind of substantial gainful work which exists in the na- 
tional economy" [Sullivan v. Zebley 1990]. 

The Court also noted that childhood disability listings were not exhaustive 
and included only the more common impairments: "There are, as yet, no 
specific listings for many well-known childhood impairments, including spina 
bifida, Down's syndrome, muscular dystrophy, autism, AIDS, infant drug 
dependency and fetal alcohol syndrome."* The Court also commented on 
evidence of cases where children, unsuccessful in obtaining childhood dis- 



♦Some of the listings of impairments for childhood disabilities were modified in 1990. 



132 



ability benefits, were found eligible on the basis of the same impairment upon 
reaching adulthood at age 18 [Sullivan v. Zebley 1990]. 

The judicial resolution of this issue came after years of effort by many 
advocacy organizations in the courts, in Congress, and through SSA to correct 
the failure of the regulations to deal adequately with childhood disability. 
The invalidation of SSA's childhood disability determination process should 
prove beneficial to thousands of children with disabilities from low-income 
families. First, there are the children who were previously denied benefits. 
The Zebley attorneys indicated that "100,000 children applied for SSI every 
year and only half were approved. The national class includes more than 
400,000 children previously denied from January 1, 1980 on" (Weishaupt 
and Stein 1991: 1]. Second, there are the children who will be eligible under 
the new standards who in the past would have been found ineligible or who 
would never have applied due to the common perception that the rules for 
qualifying children for SSI were too stringent. 

The Response to the Court Decision 

Key Actors 

In 1990, the SSA appointed a panel of experts in. child development and 
childhood disability to help the SSA develop criteria for determining disability 
based on an individualized functional assessment. The experts represented a 
wide range of areas: general pediatrics, developmental genetics, develop- 
mental pediatrics, infant development, behavioral pediatrics, pediatric psy- 
chiatry, pediatric neurology, child psychology, pediatric special education, 
home and community care, family and support systems, physical and occu- 
pational deficits, early childhood education, pediatric rehabilitation, learning 
disorders, chronic illness and somatics, and communication disorders. The 
SSA met with the experts during the months of April, May, and June [Federal 
Register 1991 ]. The panel made recommendations, such as the areas to address 
for functional assessments, the use of interdisciplinary evaluations, the need 
for flexibility to cover children whose conditions do not easily fit the estab- 
lished criteria, the need for certain categories of presumptive eligibility, and 
the need for erring on the side of inclusion for very young children. 

The SSA also developed a cadre of corresponding experts who had been 
unable to attend the public meetings to respond to the SSA's draft regulations. 
In addition, in March 1990, the SSA met with over two dozen advocacy 
groups concerned with children and/or SSI. Finally, representatives from four 
advocacy groups were invited at one stage to assist in the drafting of the 
SSA's new policies: Philadelphia's Community Legal Services (the attorneys 
representing the Zebley plaintiff class), the Association for Retarded Citizens 



133 



of the United States, the Mental Health Law Project, and the National Senior 
Citizens Law Center [Federal Register 1991]. 

Interim Standard 

For children who continued to apply for SSI benefits after the Zebley decision 
and before a final rule was published, the U.S. District Court for the Eastern 
District of Pennsylvania issued a stipulated order that put into effect in May 
1990 the Interim Standard: Claimants for SSI Disabled Children's Payments. 
The interim standard required an adjudicator to consider fully a child's func- 
tional ability to perform a full range of age-appropriate daily living activities 
and to behave in an age-appropriate manner [U.S. District Court for the 
Eastern District of Pennsylvania 1990]. 

Even with a liberalized interim standard, several state disability-determi- 
nation agencies continued to do an inadequate job of evaluating and adjudi- 
cating children's claims. In the period June 1990 to January 1991, according 
to the Zebley attorneys, "Of 1 17,608 claims nationally, 54% were allowed," 
with some state agencies allowing at rates of 76% to 98%. In the nine states 
with the lowest rate, however, the "allowance rates were below the pre- 
Zebley national rate of 50%" [Weishaupt and Stein 1991: 8). An additional 
nine states had allowances in the 50% range. According to the district court's 
order, children who were denied benefits under the interim standard would 
have their cases reviewed again when the final regulations were published 
[Weishaupt and Stein 1991: 8]. 

Mental Impairment Listings Revision 

In one other major action before publication of the new criteria for assessing 
childhood functional limitations, SSA published on December 12, 1990 new 
regulations or "listings" for determining disability for children based on 
mental disorders (or impairments) and a new listing for disabilities based on 
Down's syndrome or other serious hereditary, congenital, or acquired dis- 
orders [Federal Register .1990]. This was a result of work initiated by SSA 
before the Zebley decision, but is integral to the effectiveness of SSA in its 
response to the U.S. Supreme Court's Zebley decision. These regulations 
were effective immediately. 

The childhood mental impairment listings were substantially revised and 
took into account the child's age. The listings improved the criteria for de- 
termining who is disabled based on mental impairments before the need for 
a full individualized functional assessment, while, in fact, including some 
new functional assessment criteria at the listings level. The listings covered 
the following: mental retardation; psychoactive substance dependence dis- 



134 



orders; autistic and other pervasive developmental disorders; attention deficit 
hyperactivity disorders; developmental and emotional disorders of newborn 
and younger infants (birth to age one); organic mental disorders; schizophrenic 
delusional, and other psychotic disorders; mood disorders; anxiety disorders; 
somatoform, eating, and tic disorders; and personality disorders [Federal 
Register 1990). 

SSA also published the new Down's syndrome rule, which is also expected 
to substantially improve disability determinations for children. In the preamble 
to the new rules, SSA indicated that experience showed that virtually all 
children with Down's syndrome (except mosaic Down's syndrome) would be 
found disabled when the effects of their impairments could be properly doc- 
umented and evaluated. Therefore, the new rules allowed children whose 
Down's syndrome had been established by clinical and laboratory findings 
to be considered disabled from birth without waiting until such time as func- 
tional limitations could be proven (Federal Register I990J. 

The new listing for multiple body dysfunction due to hereditary, congenital, 
or acquired conditions would also be of benefit to many children who would 
have had more difficulty establishing disability under the old rules. This listing 
would be used to determine disability resulting from phenylketonuria (PKU); 
fetal alcohol syndrome; mental retardation with known causes associated with 
impairments of other body systems; and other impairments [Federal Register 
I990J. 

Interim Final Zebley Regulations 

The December 12, 1990 final regulations pertaining to the mental impairment 
and other listings did not include the long-awaited regulations regarding dis- 
ability based on functional limitations for all children in response to the. Zebley 
decision. New regulations for determining childhood disability on the basis 
of functional limitations were published by SSA and were immediately ef- 
fective on February II, 1991 as interim final regulations. Despite SSA's not 
having adopted some of the recommendations from the panel of experts and 
the advocacy community, the regulations, often referred to as the Zebley 
regulations, were considered to be a significant advance for children and to 
reflect current understanding of childhood disability in a way never before 
seen in SSA. These regulations became effective immediately, although SSA 
accepted public comments until July 8, 1991 after an extension of the original 
April 12, 1991 deadline. 

As a direct result of the Zebley decision and the publication of the final 
regulations, SSA expects to process 237,000 retroactive Zebley class claims, 
74,700 reconsiderations, 33, 100 hearings, and 6,800 Appeals Council reviews 
through September 30, 1993. Furthermore, SSA anticipates the reevaluation 



135 



of an additional 60,000 claims for childhood disability benefits that were 
denied since the court decision on the basis of the May, 1990 interim standard 
[U.S. Department of Health and Human Services 1991]. 



Childhood Disability Determination under Interim Final Regulations 

Under the interim final regulations, the determination of disability involves 
a sequence of steps. SSA may stop at any step in the process in which an 
affirmative decision or determination of disability can be made; otherwise, 
except for findings of work at the "substantial gainful activity" (SGA) level 
in Step 1 or "nonsevere" in Step 2, the adjudicators proceed to the next step. 
A determination or decision must be made by the final step. The following 
questions guide each of the steps: 

Step I: Is the child engaging in substantial gainful activity? 

Step 2: Does the child have a severe impairment or combination 
of impairments that causes more than a minimal limitation 
in his or her ability to function? 

Step 3: Does the child have a medically determinable impairment 
that meets or equals a listed impairment at a level of severity 
precluding any gainful activity? If not, does the child have 
an impairment or combination of impairments that is equiv- 
alent in severity to any impairment in the listings of im- 
pairments, including those functionally equivalent to any 
listing? 

Step 4: Does the child have an impairment or combination of im- 
pairments that so limits his or her physical or mental abilities 
to function independently, appropriately, and effectively in 
an age-appropriate manner that the limitations are compa- 
rable in severity to those that would disable an adult? [Fed- 
eral Register 1991: 5537-5538). 

Step 2 for determining severity is new to the childhood disability deter- 
mination process. It calls for dismissing the child's claim without going 
through all the steps. This severity step was not required by the Zebley decision 
but was added by SSA to make the sequence more comparable to the sequence 
used for adults [Federal Register 1991]. 

The equivalency test for children in Step 3 embodies a new approach. In 
fact, it allows for listings-level determinations of disability based on the child's 
functional limitations before the individualized functional assessment (IFA) 
in Step 4. 



136 



Under Step 4, provision is made to conduct an individualized functional 
assessment, which incorporates all relevant past and present medical and 
nonmedical evidence in a child's case records. Evidence from people who 
know the child and his or her functional limitations, in addition to the evidence 
provided by doctors and other health professionals, is strongly encouraged. 
Information about the child from parents, other family members, caregivers, 
educators, and practitioners in other disciplines should be collected. Where 
discrepancies exist between formal test results and the child's usual behavior 
and daily activities, SSA encourages the documentation and resolution of 
discrepancies. The evaluation of a child's development or functioning from 
infancy through childhood to maturation into adulthood may include his or 
her cognitive, communicative, motor, social, and personal/behavioral spheres 
of activity. The evaluation may further address responsiveness to stimuli (in 
children from birth to one); personal/behavioral patterns (in children from one 
to 18); and concentration, persistence, and pace in completion of tasks (in 
children from three to 18). The evaluation also seeks to determine the extent 
to which the child can engage in sustained activities appropriate to his or her 
age [Federal Register 1991]. 

Other factors considered in the IFA include but are not intended to be 
limited to repeated hospitalizations or frequent outpatient care with supportive 
therapy for chronic impairments, the effects of medication, the effects of 
structured or highly supportive settings, the nature and extent of any other 
adaptations, frequent and ongoing multidisciplinary therapy, school atten- 
dance, and the effects of treatment and intervention (Federal Register 1991]. 

The Final Court Order 

The publication of interim final regulations did not resolve all outstanding 
issues related to the U.S. Supreme Court's decision in Sullivan v. Zebley. 
On March 14, 1991, the U.S. District Court for the Eastern District of Penn- 
sylvania issued the final "Stipulation and Order." Pursuant to the order, the 
scope of the class is nationwide and includes all individuals whose applications 
for childhood disability payments were denied in whole or in part or whose 
payments were terminated on the basis of medical (disability-related) grounds 
on or after January 1 , 1980, until the date of publication of the new childhood 
disability regulations. This includes cases filed before January 1, 1980 that 
were still pending at some level of review on that date, and includes cases 
that were denied by the federal courts within those same time periods [U.S. 
District Court for the Eastern District of Pennsylvania 1991]. 

SSA must readjudicate the claims of any class member who requests review 
of his or her case within the given time frames. SSA must pay benefits to 



137 



people for all months for which the person was eligible on both disability 
and income and resource requirements. This order will result in substantial 
back payments to many people, including adults who were denied benefits 
as children. SSA, however, will not reopen any claims for the period of time 
after the individual turned 18 [U.S. District Court for the Eastern District of 
Pennsylvania 1991]. 

For purposes of determining disability factors for eligibility, SSA will 
assume, in the absence of contrary evidence or contrary medical judgment, 
that an individual was disabled from the date of first application (within the 
class period) if he or she had subsequently been found disabled under any 
disability program of the Social Security Act's Titles II or XVI, either as a 
child or as an adult. If the person had not been determined to be disabled 
under those circumstances and if evidence of the past condition is not readily 
available, SSA will decide whether it was reasonable to presume, based on 
the nature of the impairment, that his or her past condition and impairments 
were as severe as they are currently [U.S. District Court for the Eastern 
District of Pennsylvania 1991]. 

For purposes of determining the nondisability factors of eligibility (i.e., 
income and resource limitations), SSA will assume, for months prior to 
January 1990, that the person met income and resource requirements unless 
ineligibility is established by records available to SSA or by information 
provided by the claimant. Payments will be calculated to equal the applicable 
monthly national average federal SSI childhood disability payment, plus the 
applicable federally administered state supplement for that month. Class mem- 
bers may submit evidence that they qualified for more than the average 
payment. The average benefit assumption will not apply for months after a 
person turned 18. For January 1990 to the present, SSA will use existing 
procedures for determining income and resource eligibility [U.S. District 
Court for the Eastern District of Pennsylvania 1991]. 

The Secretary of Health and Human Services will notify all state Medicaid 
agencies about the effect of the new childhood disability standard and en- 
courage them to extend retroactive benefits to any class member (a) whose 
Medicaid coverage was terminated or denied after January 1, 1980 on the 
grounds that he or she did not meet the former SSI childhood disability criteria, 
and (b) who could provide documentation regarding certain paid or unpaid 
bills for services that would be Medicaid-reimbursable in that state. SSA must 
also notify class members that if they seek Medicaid benefits, they should 
contact the appropriate state Medicaid agency [U.S. District Court for the 
Eastern District of Pennsylvania 1991]. 

Other major agreements reached by the parties and ordered by the court 
under the Stipulation and Order pertained to nationwide outreach, notice to 



138 



potential class members, priority for review, quality assurance and other 
reviews, and a toll-free telephone number [U.S. District Court for the Eastern 
District of Pennsylvania 1991). This order, along with the Final Interim Rule, 
provides the foundation for ensuring children with disabilities their rights 
under the U.S. Supreme Court's Zebley decision. 



Implications 

The ultimate impact of the Zebley decision will depend on the commitment 
and dedication of many professionals, advocates, and family members. In 
particular, child welfare workers, other social work practitioners who work 
directly with children with disabilities and their families, and social work 
educators will play pivotal roles in just how many potentially eligible children 
and class members eventually will receive benefits. 

The child welfare community should be aware that, in determining child- 
hood disability, the inclusion of Step 2 dismisses a claim without going 
through all the steps, including the IFA. The potential for misapplication of 
this test could result in negative decisions for children who, under the law, 
should be considered disabled. Short of the complete elimination of this 
childhood severity step, advocates are urging SSA to make a commitment to 
monitor carefully its implementation and reexamine the value or appropri- 
ateness of such a step. It then becomes incumbent upon child advocates and 
service providers, in particular, to help ensure that a child is given every 
opportunity to prove that a combination of "mild" impairments in fact limits 
his or her ability to function in an age-appropriate manner. In many cases, 
this will require that service providers make special efforts to collect or develop 
the information necessary to prove the child's eligibility. More broadly, di- 
agnostic assessment centers could facilitate all relevant steps in childhood 
disability determinations by accomodating their recordkeeping to the type of 
information needed for making these determinations. 

Child advocates and service providers must also be cognizant of the problem 
of determining disability for children who are too young for test results to 
reflect functional limitations accurately. The current language of SSA's reg- 
ulations provides some leeway for infants but fails to accomodate those chil- 
dren over age one who may be too young for certain kinds of tests, such as 
certain vision and hearing tests. Yet this information may be especially critical 
to the child during the IFA stage when it is important to take into account 
all limitations, since the child's overall functional abilities are at issue. To 
accomodate children over age one who are also too young to test, child 
advocates and service providers should seek inclusion within SSA's regula- 



139 



lions concerning consideration of a child's age and how it affects his or her 
ability to be tested. Provision should be made for equivalence determinations 
of present disability based on available evidence, medical knowledge of the 
course and early signs of impairments, and informed clinical judgments. 

Unquestionably the most important response to the Zebley decision from 
the professional community will be comprehensive outreach to inform po- 
tential class members of their right to request readjudication of their claims 
and to encourage the families of children with disabilities who would not be 
part of the class to make formal application for SSI childhood disability 
benefits. Because virtually all children who receive or are eligible for these 
benefits are likely to come into contact with health care facilities, social service 
agencies, and local education agencies, a successful outreach program will 
be best delivered when these three systems communicate their individual 
efforts and coordinate their collaborative efforts. Once a potential recipient 
is identified, the child and the family should be directed to the appropriate 
Social Security office for filing an application. For potential Zebley class 
members, additional assistance may be obtained through the plaintiffs coun- 
sel, Zebley Implementation Project, Community Legal Services in Philadel- 
phia. Informed decisions by families of children with disabilities will best be 
made when professionals provide accurate and up-to-date information on all 
entitlement and assistance programs available to them (such as Aid to Families 
with Dependent Children) and the implications of each and interactions among 
them. 

The major changes brought about by the Zebley decision in determining 
SSI childhood disabilities also require the dissemination of information to 
social workers and others involved with children who are disabled. Social 
work educators should incorporate this information into social welfare policy 
courses both at the B.S.W. and M.S.W. levels. Field supervisors and other 
practitioners should be encouraged to attend inservice training programs on 
this topic and share this information with others. Students undertaking their 
field internships at agencies serving children with disabilities should be en- 
couraged by their supervisors as part of their educational experience to present 
workshops to parents of children with disabilities. Practitioners will have to 
expand their knowledge and understanding of the new regulations so that they 
may appropriately counsel parents of children with disabilities, whose claims 
might have been considered in the past to be too much of a long shot, to 
apply for benefits on their behalf. Furthermore, practitioners should be aware 
of broader social welfare policy implications; for instance, the availability of 
SSI benefits to assist families may release other funds, such as foster care 
funds, for use in other important areas including family support and reuni- 
fication and out-of-home placement prevention. 



140 



Lastly, implementation of any new policy initiative is influenced by a 
multitude of factors. Child welfare researchers should begin to conduct re- 
search profiling children with disabilities benefiting from the Zebley decision 
in their communities and states and documenting the obstacles to serving 
potential recipients successfully. Armed with such information, the child 
welfare community will be better positioned to recommend appropriate changes 
in the regulations and their implementation. 

Although the Zebley decision probably will encounter many impediments 
as the government proceeds to meet its responsibilities, this decision will 
dramatically improve the quality of life for thousands of children with disa- 
bilities in low-income families. The child welfare community will have a 
significant role to play in bringing this about. ♦ 

References 

"Children to Get Second Chance for Aid." Washington Post (March 15, 1991): A21. 

Code of Federal Regulations. Employee's Benefits. Volume 20, Part 404, Subpart P, Appendix 
I . Washington, DC: Office of the Federal Register, National Archives and Records Admin- 
istration. 

Federal Register. Part II. Department of Health and Human Services, Social Security Admin- 
istration. Federal Old-Age Survivors and Disability Insurance and Supplemental Security 
Income for the Aged, Blind, and Disabled; Final Rules. Volume 55, No. 239. December 12, 
1990. 

Federal Register. Part V. Department of Health and Human Services, Social Security Admin- 
istration. Supplemental Security Income; Determining Disability for a Child Under Age 18; 
Final Rule With Request for Comments. Volume 56, No. 28. February II, 1991. 

Sullivan, Secretary of Health and Human Services v. Zebley. et al. On Writ of Certiorari to the 
United States Court of Appeals for the Third Circuit. Brief of Amici Curiae. No. 88-1377. 
October Term. 1988. 

Sullivan, Secretary of Health and Human Services v. Zebley, el al., 1 10 S. Ct. 885 (February 
20. 1990). 

U.S. Department of Health and Human Services. Justifications of Appropriations Estimates for 
Committee on Appropriations. FY 1992 Appropriations and FY 1991 Supplemental. Wash- 
ington, DC: U.S. Department of Health and Human Services, Social Security Administration, 
1991: 147-154. 

U.S. District Court for the Eastern District of Pennsylvania. Stipulation and Order. Zebley v. 
Sullivan. Civil Action No. 83-3314. May. 1990. 

U.S. District Court for the Eastern District of Pennsylvania. Stipulation and Order. Zebley v. 
Sullivan. Civil Action No. 83-3314. March. 1991. 

Weishaupt, Richard P.. and Stein. Jonathan M. "Supreme Court's Zebley Decision Greatly 
Expands Eligibility for SSI Childhood Disability Benefits and Medicaid." Philadelphia, PA: 
Community Legal Services. Inc., February, 1991. 

(Address requests for a reprint to Martha Ford, Association for Retarded Citizens, 
1522 K Street. NW. Suite 516, Washington. DC 20005.) 



141 

Mr. McDermott. Mr. Rockwood. 

STATEMENT OF FREDERICK W. ROCKWOOD, PRESIDENT, THE 
FORETHOUGHT GROUP, RATESVILLE, IND. 

Mr. Rockwood. Thank you, Congressman McDermott, Congress- 
man Camp. It is indeed a privilege and opportunity to be here 
today and I thank the committee for this chance to express our 
views. 

My name is Fred Rockwood, and I am president of the Fore- 
thought Group, which is headquartered in Batesville, Ind. Fore- 
thought markets preneed funeral planning through funeral direc- 
tors throughout the United States, and provides life insurance 
products to fund those funerals. 

I am testifying today on behalf of a coalition of companies which 
strongly oppose the burial exclusion recommendations in the final 
report. These companies are listed in my testimony. 

While simplification of the current SSI resource exclusions may 
appear appealing on its face, the recommendation to eliminate the 
burial exclusions fails to take into account numerous undesirable 
consequences which would result if this proposal were adopted. In 
particular, elimination of the burial exclusions would, first, impose 
serious emotional and financial burdens on SSI claimants; second, 
undermine the policy considerations on which the exclusions are 
based; and third, increase the likelihood that SSI recipients will 
have to be buried at government expense. 

Nor will "streamlining" the resource exclusions bring desirable 
consequences, such as administrative simplification and elimi- 
nation of systemic inequities, as proponents may promise. Congress 
should undertake real, not illusory, simplification of the SSI re- 
source exclusions by enacting a new burial exclusion which treats 
burial assets in the same manner as other essential resources. 

Life insurance-funded plans came into existence after the statu- 
torily provided exclusion and therefore presented several unique 
policy and regulatory questions to the Social Security Administra- 
tion. The industry has attempted to work in good faith with SSA 
to ensure development of reasonable, fair regulatory policies so that 
life insurance-funded plans enjoy equal competitive footing in the 
marketplace. 

Clearly, some "modernization" of the SSI resource exclusions is 
needed to clarify the burial exclusions and to ensure that the most 
accessible means of prefunding funerals is available to SSI recipi- 
ents. The industry supports this modernization. However, we dis- 
agree strongly with SSA's approach — the solution to these problems 
is not simply to eradicate the burial exclusions. 

Many elderly individuals are plagued by fears about how they or 
their spouse will be buried, and who will bear the expenses of the 
burial. Congress recognized that the peace of mind engendered by 
preneed funeral planning was important enough to warrant both 
the exclusion of the value of burial space items and burial funds 
as countable resources for SSI benefit determination purposes. To 
do away with either exclusion in the name of simplification, with- 
out any assertion (much less evidence) that the administration of 
these particular exclusions is especially burdensome, flies in the 



142 

face of the policy objectives underlying the exclusions without any 
attempt at justification. 

We agree that the current resource limits are woefully inad- 
equate and should be increased to a level which would allow recipi- 
ents to save money for certain basic needs, such as medical emer- 
gencies. However, these limits should be raised, period — not raised 
to "offset" the elimination of certain exclusions. This approach does 
nothing to increase the effective resources available to SSI recipi- 
ents. It is, in effect, a "robbing Peter to pay Paul" approach. 

Eleven years ago, Congress enacted the burial space and burial 
funds exclusions to relieve beneficiaries from having to make a 
cruel and insensitive choice between necessary SSI benefits and 
their funeral plans. The authors of the modernization project's final 
report reinvent this macabre choice for SSI recipients. 

Despite assertions to the contrary, the proposed increase in re- 
source limits will not spare current SSI beneficiaries from redeter- 
mination if they elect to prefund their burials. The final report it- 
self notes that several experts voiced concern that the elimination 
of these exclusions would require some recipients to dispose of as- 
sets in order to maintain benefit eligibility. This criticism is glossed 
over in the report, which adopts the opinion of others who are con- 
fident that the proposed increase in general resource limits should 
allow recipients with currently excluded resources to keep them. 

This confidence is misplaced. The proposed increases in resource 
limits, in fact, will not be sufficient to allow recipients to keep cur- 
rently excluded burial arrangements. Many SSI recipients use life 
insurance policies and burial trusts to fund their funerals, and 
would be forced to surrender those policies or cancel the trusts 
which have grown in value over time to keep pace with inflation. 

In addition, the cost of burial will certainly shift directly to the 
Federal, State, or local government if the burial space and burial 
funds exclusions are eradicated. Other than very restricted veter- 
ans' benefits, there are no viable government resources directed at 
covering indigent burial expenses. 

In changing the SSI rules, the Federal Government should be 
alerted to unintended consequences of substantial potential cost- 
shifting. By eliminating the incentive to prefund and prearrange 
one's funeral, government may ultimately bear the burden of pro- 
viding funerals in many instances. 

The only statutory exclusions to be eliminated by the proposed 
"streamlining" are those relating to burial spaces and burial funds, 
life insurance, and Federal housing assistance. 

This raises several issues. First, the report claims that the elimi- 
nation of these four exclusions will spare the Social Security Ad- 
ministration significant administrative costs. SSA fails to offer any 
data or substantiation on time or paperwork spent in administering 
these exclusions. Second, the proposal leaves in place provisions 
which arguably are more difficult for SSA to administer, such as 
the exclusion for business property essential for self-support. Third, 
the proposal fails to take into account that its implementation will 
add a new administrative burden: That of valuing those assets 
which were previously excluded. 



143 

In sum, it is unrealistic to assume that the proposed streamlin- 
ing will fulfill its proffered objective of reducing administrative ex- 
penses. 

An additional justification offered on behalf of the proposed 
streamlining is that it will remove present inequities in the SSI 
program. We believe this assertion is incorrect. The inequities are 
not caused by permitting individuals to prearrange their funerals. 
Prearranging meets a need which, over time, becomes more impor- 
tant to SSI recipients. It is a necessity for all people. 

Clearly, the solution to the administrative and interpretive prob- 
lems which have accompanied the burial space and burial funds ex- 
clusions is not to "streamline" them out of existence. Instead, Con- 
gress should effect real simplification of the existing exclusions by 
enacting a new burial exclusion which first, replaces the bifurcated 
scheme which separates burial assets into arbitrary categories, and 
two, clearly specifies its applicability to the preninding arrange- 
ments which have developed since the exclusion first went into ef- 
fect. Our coalition is prepared to submit a legislative proposal for 
the enactment of a new burial exclusion which meets both of these 
above-listed objectives, and we would be happy to work with the 
subcommittee. 

In conclusion, our companies urge the members of this sub- 
committee to reject the recommendation to eliminate the burial 
space and burial funds exclusions under the auspices of "streamlin- 
ing." Congress should undertake real, not illusory, simplification of 
the SSI resource exclusions. 

Congress has always recognized the dignity of the individual 
unto death. The certainty of death and the resources required for 
a humane funeral are essential to all individuals, perhaps more so 
for those who find themselves in need of SSI benefits. Tney should 
not be eliminated from the resources which SSI claimants are al- 
lowed to retain. We look forward to working with Congress and the 
Social Security Administration to ensure genuine simplification of 
the burial exclusions. 

Thank you, very much. 

[The prepared statement follows:] 



144 



TESTIMONY OF FREDERICK W. ROCKWOOD 
COALITION OF COMPANIES 

Good morning, Mr. Chairman. My name is Fred Rock wood, and I am President of the 
Forethought Group, head q ua r tered in Batesville, Indiana. Forethought markets pre-need funeral 
planning through funeral directors throughout the United States, and provides life insurance 
products to fund those funerals. 

I am testifying today on behalf of a coalition of companies which strongly oppose the burial 
exclusion recommendations in the Final Report. These companies include: 

American Funeral Assurance Company, Amory, MS; 
First Capital Life Insurance Company, New Orleans, LA; 
Forethought Life Insurance Company, Batesville, IN; 
Funeral Security Plans, Inc., Kansas City, MO; 
Hartland Management Company, Topeka, KS; 
Homesteaders Life Insurance Company, Des Moines, IA; 
Investors Heritage Life Insurance Company, Frankfort, KY; 
Loewen Group, Covington, KY; 
Pan Western Life Insurance Company, Columbus, OH; 
Pierce National, Greenville, SC; 
Prairie States Life Insurance Company, Rapid City, SD; 
Service Corporation International, Houston, TX; 
Settlers Life Insurance Company, Briston, VA; 
United American Insurance Company, Dallas, TX; and 
United Family Life, Atlanta, GA. 

We appreciate the opportunity to appear here today both to express our concerns and our desire 
to work with Congress as you move forward with SSI reforms. 

While simplification of the exclusions permitted under the current statute may appear 
appealing on its face, the recommendation to eliminate the burial exclusions fails to take into 
account numerous undesirable consequences which would result if this proposal were adopted. 
In particular, the elimination of the burial space and burial funds exclusions would; (1) impose 
serious emotional and financial burdens on SSI claimants; (2) undermine the policy 
considerations on which the exclusions are based; and (3) substantially raise government 
expenditures by both enlarging the pool of eligible SSI recipients and increasing the likelihood 
that these recipients will have to be buried at government expense. 

Nor will "streamlining" the resource exclusions bring desirable consequences, such as 
administrative simplification and elimination of systemic inequities, as proponents may promise. 
The burial space and burial funds exclusions perhaps have presented technical and sometimes 
complicated implementation issues. However, the solution to perceived administrative problems 
is not to eliminate the exclusions. Instead, Congress should undertake ieal, not illusory, 
simplification of the SSI resource exclusions by enacting a new burial exclusion which treats 
burial assets in the same manner as other essential resources. 

PREARRANGEMENT AND PRE-FUNDING OF FUNERALS THROUGH LIFE 
INSURANCE AND THE CURRENT REGULATORY SCHEME 

Before discussing our concerns with respect to the proposed "streamlining," I would like to 
briefly address the pre-funding of funerals through life insurance. Insurance-based programs are 
designed to allow consumers to fund their funerals by purchasing life insurance or annuities 
equal to the value of the funeral arrangements they select. The consumer can choose to pay the 
premium all at once, or pay monthly for up to ten years. The consumer also executes a 
contingent assignment of proceeds to a funeral firm in return for the firm's promise to provide 
funeral goods and services. All assignments are fully contingent on the performance of the 
promised services. If the services are not provided, proceeds are paid to the beneficiary of the 
policy. Any excess proceeds over the retail cost of the funeral are likewise payable to the 
designated beneficiary. 



145 



Life insurance plans offer several advantages to the consumer. First, insurance-funded plans 
require a smaller initial cash outlay, and second, they benefit the consumer through their 
guarantee to pay, regardless of whether all of the premiums have been paid. Almost all of the 
policies offered to consumers are guaranteed issue and have little or no underwriting. Even if a 
customer is ill at the time of purchase, he or she can still be fully covered after two years of 
payments. In contrast, individual plans and regulated trusts must both be fully funded in order to 
pay for services. Thus, life insurance plans provide several economic benefits to elderly and/or 
disabled SSI recipients who wish to secure a guaranteed funeral. 

Life insurance-funded plans came into existence after the statutorily-provided exclusion and 
therefore presented several unique policy and regulatory questions to the Social Security 
Administration (SSA). The industry has attempted to work in good faith, closely and 
cooperatively with SSA to ensure development of reasonable, fair regulatory policies so that life 
insurance-funded plans enjoy equal competitive footing in the marketplace. Differing 
interpretations as to what constitutes a burial space "held for" an individual have led to a 
regulatory scheme which could, at best, be described as murky. These cha n g ing interpretations 
have presented difficulties to the industry and have left many SSI recipients uncertain as to 
whether life insurance-funded plans remain a viable option under the statute. 

Clearly, some "modernization" of the SSI resource exclusions is needed to clarify the burial 
exclusions and to ensure that the most accessible means of pre-funding funerals is available to 
SSI recipients. The industry supports this modernization. However, we disagree strongly with 
SSA's approach - the solution to these problems is not simply to eradicate the burial exclusions. 

NUMEROUS UNDESIRABLE CONSEQUENCES WILL RESULT IF THE BURIAL 
EXCLUSIONS ARE ERADICATED 

1. "Streamlining" the Burial Exclusions Undermines the Policy Objectives 

Underlying the Resource Exclusions 

The fundamental right of an individual to maintain his or her dignity while qualifying for 
assistance has always been an underlying principle of the SSI program. As noted in the Final 
Report, the rationale behind the resource exclusions is that "certain property is so essential to 
one's well-being . . . that its owner should not be expected to sell it and use the cash to meet 
day-to-day living expenses." See 57 Fed. Reg. 40759-60 (1992). 

Many elderly individuals are plagued by fears about how they or their spouse will be buried, 
and who will bear the expenses of that burial. Of all of the exclusions currently permitted, it may 
be argued that the burial exclusions are the only ones which every person ultimately needs. 
Congress recognized that the peace of mind engendered by pre-need funeral planning was 
important enough to warrant both the exclusion of the value of burial space items and burial 
funds as countable resources for SSI benefit determination purposes. To do away with either 
exclusion in the name of simplification, without any assertion (much less evidence) that the 
administration of these particular exclusions is especially burdensome, flies in the face of the 
policy objectives underlying the exclusions without any attempt at justification. 

Note that raising the resource limits to counterbalance eliminating the exclusions thwarts the 
SSI program's goal of identifying the truly needy and ensuring more equitable treatment among 
recipients. The scheme for the determination of eligibility established by Congress - low 
resource limits with specified exclusions - was designed to target the neediest segment of the 
population without excluding persons who own certain assets deemed essential to their 
well-being. 

Certainly, we agree that the current resource limits are woefully inadequate and should be 
increased to a level which would allow recipients to save money for certain basic needs, such as 
medical emergencies. However, these limits should be raised, period - not raised to "offset" the 
elimination of certain exclusions. Redefining someone who has a $5,000 pre-paid funeral plus 
52,000 in other resources to an individual who has not made arrangements regarding his or her 
burial but has $7,000 in the bank is a "robbing Peter to pay Paul approach" and does nothing to 
identify and assist the truly needy or promote equity. 



146 



2. Elimination of the Burial Exclusions Will Impose Serious Emotional and Financial 
Burdens on SSI Claimants 

Eleven years ago, Congress enacted the burial space and burial funds exclusions to relieve 
beneficiaries from a cruel and insensitive choice. As then-Senator Howard Cannon (R-Nev.) 
noted, prior to enactment of the burial exclusions, "many elderly Americans . . . [were] being 
faced with the macabre choice between lifesaving welfare assistance and giving up their plans for 
disposition of their bodily remains." 128 Cong. Rec. S8943 (daily ed. July 22, 1982). To correct 
what was, in the words of Senator Cannon, "an insensitive and appalling test of eligibility," 
Congress enacted the burial space and burial funds exclusions, which allow SSI recipients to 
exclude from countable resources up to $1,500 in burial funds, in addition to the value of burial 
spaces held for the recipient and his or her spouse. Sfig 42 U.S.C § 1382b(a)(2)(B), 1382b(d) 
(1991). 

The authors of the Modernization Project's Final Report reinvent this macabre choice for SSI 
recipients. Despite assertions to the contrary, the proposed increase in resource limits will not 
spare current SSI beneficiaries from redetermination if they elect to pre-fund their burials. The 
Final Report itself notes that several experts voiced concern that the elimination of these 
exclusions would require some recipients to dispose of assets in order to maintain benefit 
eligibility. See 57 Fed. Reg. 40761 (1992). This criticism is glossed over in the Report, which 
adopts the opinion of others who are confident that the proposed increase in general resource 
limits should allow recipients with currently excluded resources to keep them. 

This confidence is misplaced. The proposed increases in resource limits, in fact, will not be 
sufficient to allow recipients to keep currently excluded burial arrangements. The National 
Funeral Directors Association reported that in 1992, the average cost of a traditional funeral 
including a vault was $4,493, with an in-ground burial adding up to $1,000 to total funeral costs. 
The July 1993 issue of Consumer Reports advised its readers to estimate about $7,000-$8,000 for 
total funeral costs. Thus, funeral costs for an SSI recipient and/or spouse could exceed the 
proposed $7,000 and $10,500 individual and couple resource limits. 

Many SSI recipients use life insurance policies and burial trusts to fund their funerals, and 
would be forced to surrender those policies or cancel the trusts which have grown in value over 
time to keep pace with inflation. The cash surrender values of these policies and, in many cases, 
the cancellation value of burial trusts are substantially less than the amount set aside by the 
recipient for funeral and burial expenses. If forced to cancel such an arrangement, the SSI 
recipient would be left with no funeral ~ and without sufficient funds to pay his or her funeral 
expenses. New claimants would likewise be forced to "spend down" these assets in ordeT to 
qualify for benefits. 

Aside from these obvious financial burdens, eliminating the burial exclusions would put 
claimants through unfathomable emotional pain. Forcing elderly individuals who want to take 
steps to plan for their death into uncertainty as to the disposition of their bodily remains is unfair 
and horribly insensitive, and entirely at odds with the policies underlying the resource 
exclusions. 

3. Eradication of the Burial Exclusions Will Increase Government Expenditures 

In addition, the cost of burial will certainly shift directly to tpe federal, state, or local 
government if the burial space and burial funds exclusions are eradicated. Although some 
widows and widowers still receive a small Social Security lump sum benefit following the death 
of their spouse, as of 1 98 1 , these payments may no longer be funeral-related. ' 






See Omnibus Budget Reconciliation Act of 1981, Pub. L. No. 97-35, sec. 2202, 
§ 202(i), 95 Stat. 357, 834 (codified as amended at 42 U.S.C. § 402(i) (1991)). 



147 



Other than very restricted Veterans' benefits, there are no viable government resources 
directed at covering indigent burial expenses. 2 In changing the SSI rules, the federal government 
should be alerted to unintended consequences of substantial potential cost-shifting. By 
eliminating the incentive to pre-fund and prearrange one's funeral, the federal government may 
ultimately bear the burial burden in many instances. 

THE PROPOSED "STREAMLINING" WILL NOT FULFILL ITS PROFFERED 
OBJECTIVES 

1. The Proposed "Streamlining" Will Not Simplify Program Administration 

The authors of the Final Report propose streamlining the resource exclusions by eliminating 
exclusions other than those for the home, an essential car, business property essential for 
self-support, household goods and personal effects, and those which are time-limited. Simply 
put, the only statutory exclusions to be eliminated are those relating to burial spaces and burial 
funds, life insurance, and federal housing assistance. 

This raises several issues. First, the Report claims that the elimination of these four 
exclusions will spare the Social Security Administration significant administrative costs. SSA 
fails to offer any data or substantiation on time or paperwork spent in administering these 
exclusions. Second, the proposal leaves in place provisions which arguably are more difficult for 
SSA to administer, such as the timing-based exclusions for various government payments and 
the exclusion for business property essential for self-support. Third, the proposal fails to take 
into account that its implementation will add a new administrative burden: that of valuing those 
assets which were previously excluded. In sum, it is naive and unrealistic to assume that the 
proposed streamlining will fulfill its proffered objective of reducing administrative expenses. 

2. Elimination of the Burial Exclusions Will Not Reduce Systemic Inequities 

An additional justification offered on behalf of the proposed streamlining is that it will 
"remove present inequities (i.e.. differences in how much people can retain, depending on the 
manner of retention). . . ." See 57 Fed. Reg. 40761 (1992). This assertion is patently absurd. 
The primary source of inequity within the SSI system is left firmly entrenched: the limitless 
exclusions for the home 5 and an "essential" automobile. 4 Theoretically, one could live in a 
million-dollar house (with unlimited equity) and drive an essential Mercedes Benz and still 
receive SSI benefits if he or she otherwise met the specified income and resource limits. 
Although this scenario might seem extraordinarily unlikely, it cannot be disputed that there is 
substantial inequity in a system in which a homeless person and a person who has home equity of 
$300,000 are under equal consideration for benefits. 

CONGRESS SHOULD SEEK REAL, NOT ILLUSORY, SIMPLIFICATION THROUGH 
THE ENACTMENT OF A BURIAL-RELATED RESOURCE EXCLUSION 

Clearly, the solution to the administrative and interpretive problems which have accompanied 
the burial space and burial funds exclusions is not to "streamline" them out of existence. Instead, 
Congress should effect real simplification of the existing exclusions by enacting a new burial 
exclusion which ( 1 ) replaces the current bifurcated scheme which separates burial assets into 
arbitrary categories, and (2) clearly specifies its applicability to the pre-funding arrangements 
which have developed since the exclusion first went into effect. Our coalition is prepared to 



The current SSA and VA burial benefit levels of $255 and $300-$1500 respectively are 
woefully inadequate to fund a traditional funeral. Sf£ 42 U.S.C. § 402(i) (1991) (SSA 
burial benefit); 38 U.S.C. §§ 2302, 2303, 2307 (1991) (Veterans' burial benefits). 

Sec 20 CFR § 416.1212 (1992) ("We do not count a home regardless of its value."). 

Sec 20 CFR § 416.1218 (1992) ("One automobile is totally excluded regardless of its 
value if. . .[i]t is necessary . . . ."). 



148 



submit a legislative proposal for the enactment of a new burial exclusion which meets both of the 
above-listed objectives. 

1. Replacement of Burial Funds and Burial Space Categories With One Broad 
Provision Applying to All Burial Assets 

The current burial space and burial funds exclusions should be replaced with one broad 
exclusion which applies to all types of burial assets and necessary items and services. Although 
when first enacted, the current burial exclusions were intended to separate two distinct types of 
burial-related resources —"spaces" (e^g,, burial plots) and "funds" (cash set aside to pay for one's 
funeral) ~ these distinctions today present artificial and sometimes inconsistent delineations. 

As consumers have increasingly pre-funded a variety of burial-related items and services, the 
"space" and "funds" distinctions have become less clearcut. For example, under the SSA's 
current Program Operations Manual System ("POMS"), a pre-paid contract for a headstone is 
considered a burial space (subject to no limitations as to value) while a contract for embalming is 
considered as "burial funds" subject to a $1 ,500 limitation on excludability. Sfig POMS § SI 
01 130.420(E)(2)(a) (1990). These kinds of arbitrary distinctions should be eliminated by 
grouping burial-related items and services necessary for the use of such items into one broad 
category of excluded "burial assets." 

The Federal Trade Commission's Funeral Industry Practices Rule (16 CFR § 453) was 
initially promulgated in 1982 and was reviewed and amended in 1992. It defines and regulates 
funeral service practices and provides an excellent basis upon which to define the broad range of 
services and merchandise which are selected by SSI claimants who prearrange their funeral. 
These definitions provide clear guidance as to the scope of funeral merchandise services and 
funeral related items which when blended with current SSI definitions, could be defined as 
"burial assets." These definitions also provide uniformity and a legislative history which would 
promote a streamlining of the program through common definition and a recognition of the 
common elements of today's funerals which may run from cremation to a traditional burial. 

2. Applicability of Exclusion Only to Pre-Funding Arrangements Which are 
Irrevocable 

Under a streamlined definition which would meet any budget neutrality test, SSI would 
recognize that the value of the funding vehicle (life insurance, bank trust, or other similar 
arrangement) designated to purchase burial assets currently or upon the death of the SSI claimant 
would be excludable as a countable resource. The present arbitrary distinction, made relative to 
whether there is a current purchase of merchandise and services versus a future purchase at time 
of death, would be eliminated. Thus, the proposed exclusion would specify its applicability to all 
forms of pre-need funding, provided that such funding is clearly tied to purchase of burial assets 
for the individual, his spouse, and/or members of his immediate family. This represents not an 
addition to, but rather a clarification of, current SSA policy with respect to such arrangements. 

No public interest is served by restricting the manner in which burial assets are secured. As 
long as a contract exists which ties the funding directly to the assets, the integrity of federal funds 
should be protected. The use of alternative methods of funding burial assets does not create a 
new class of individuals who will fund their funerals; it simply provides an option as to how their 
funerals will be funded. 



In conclusion, our companies urge the Members of this Subcommittee to reject the 
recommendation to eliminate the burial space and burial funds exclusions under the auspices of 
"streamlining." The proposed change undermines the considerations underlying the SSI resource 
exclusions. Moreover, if implemented, numerous SSI beneficiaries will be subject to 
re-determination, loss of SSI benefits, and probable loss of their funded funeral. 



149 



Aside from the increased administrative burden and inequity to existing recipients, Congress 
should undertake real, not illusory, simplification of the SSI resource exclusions. Congress has 
always recognized the dignity of the individual unto death. The certainty of death and the 
resources required for a humane funeral are essential to all individuals, perhaps more so for those 
who find themselves in need of SSI benefits. They should not be eliminated from the resources 
which SSI claimants are allowed to retain. We look forward to working with Congress and the 
Social Security Administration to ensure genuine simplification of the burial exclusions. 



150 

Mr. McDermott. Thank you. 

Mr. Camp, do you have questions? 

Mr. Camp. Thank you, Mr. Chairman. 

Mr. McElwain, I am sorry I wasn't here for your testimony. I did 
read your written statement, however, and I just have a couple of 
questions. 

What is the average cost of burial services? 

Mr. McElwain. Well, it will vary from State to State, but I think 
nationally probably somewhere between $4,000 and $5,000 would 
include merchandise, services, and cemetery expenses, but I would 
say somewhere between $4,000 and $5,000 would be an average. 

Mr. Camp. And as a practical matter, if there is no way to pay 
for the burial, how is that accomplished, because obviously every- 
one gets buried, so how are indigent burials dealt with? 

Mr. McElwain. Well, there are a couple of ways. Some States 
have funds available. For example, I am from Kansas. We have a 
maximum of $1,150 that is available. The family cannot add funds 
to that in any way. It is a take-it-or-leave-it proposition. They have 
to be eligible for that through a budgeting process that SRS does. 

There are States, such as Missouri, next to us, that has no provi- 
sion for that. That is mainly borne on the back of the funeral in- 
dustry to take care of those people, or if someone in the community 
comes forward and adds some funds to it, that can be done. 

The third way would be if there is a family member from some- 
where that would want to come forward and take that responsibil- 
ity. But primarily government — the governmental agencies in most 
States will proviae some sort of basic indigent funeral expense. 

Mr. Camp. What — I don't know if you know this or not, but you 
mentioned that States often have prepaid funeral statutes, and 
many of them are irrevocable. Do you know how many States allow 
revocable prepaid funeral plans? 

Mr. McElwain. I am going to pass that question to Scott 
Gilligan. I think he has a better picture of it. 

Mr. Gilligan. Nearly all States would allow revocable, approxi- 
mately anywhere from 35 will allow irrevocable, and some have 
caps on dollar amounts, how much can be put in an irrevocable 
trust. 

Mr. Camp. But if they are receiving public assistance, don't many 
more States require that that prepaid funeral plan be irrevocable? 

Mr. Gilligan. Yes. 

Mr. Camp. What is that percentage, I guess, of those? 

Mr. Gilligan. We would have to get you the numbers. I hesitate 
to guess. It would probably be less than half have some kind of dol- 
lar cap on that, but it would be over 10 — some number in between 
there would have a cap on that. 

Mr. Camp. OK. 

I do want to work with you on this issue. I do think that the re- 
source exclusion for funeral and burial expenses has merit, and I 
would certainly like to work with you on seeing that maintained. 

I have no further questions, Mr. Chairman. 



151 

Mr. McDermott. Thank you. We want to thank all of you for 
coming. Obviously the issue of the trust is a complicated one and 
is probably a subject for another hearing at another point, but I 
think we will hold off on that one for today. 

Chairman Ford. So we thank you very much, all of you, for com- 
ing today. Thank you. 

[Whereupon, at 1:28 p.m., the hearing was adjourned.] 

[Submissions for the record follow:] 



152 



jSiS Alliance for the Mentally III of New York State 




260 Washington Avenue. Albany. New York 12210 
(518)462-2000 • HotLine 1-800-950-3228 



TESTIMONY for the OVERSIGHT HEARING ON SUPPLEMENTAL SECURITY INCOME held by the 
Honorable Harold E. Ford, Chairman, Subcommittee on Human Resources, Committee 
on Ways and Means, under date of September 1993. 

BY: ALLIANCE FOR THE MENTALLY ILL of NEW YORK STATE, represented by Mrs. Julie Renda 

Thank you, Mr. Chairman, for this Oversight Hearing on the SSI program, and for 
the opportunity to testify here today. I am speaking to you as the mother of a 
mentally disabled daughter who has been an SSI recipient since 1980. Her mentally 
disabling condition today is mild schizophrenia, and she is able to live in the 
community with another sharing person thanks to modern day assistance from a local 
community mental health center, anti-psychotic medications provided through the 
Medicaid program and her own medication compliance. I am fiercely proud of her 
for her courage and character in continuing to battle this debilitating illness. 

I am also here to speak in behalf of other parents of the mentally ill who belong 
to the New York State Alliance for the Mentally 111 (AMI-NYS) , a non-profit organi- 
zation of advocacy and support. We have been studying the SSI Modernization Panel 
Report, and we have even submitted our views to this panel. I am here to lend our 
support to their recommendations on behalf of our statewide organization. Indeed, 
the Alliance is nationwide, with a national office nearby in Arlington, Virginia. 
National AMI will also be presenting testimony today. 

Nationwide there is also an SSI Advocacy group which has and will continue to sup- 
port the recommendations of the SSI Modernization panel of experts. In brief sum- 
mary, we join them in supporting an increase in the monthly benefit rate for the 
disabled and elderly on SSI, and we support their recommendation for an improvement 
in outreach efforts by the Social Security Administration. Also we support their 
recommendation that the l/3rd In Kind Support and Maintenance rule be eliminated. 
However, there is some concern in our minds whether or not Congress will be willing 
to eliminate this rule across the board. What we would like to see is a more equit- 
able rule. To discuss this complicated rule in this short period of public testimony 
might add to the confusion. We have included in our written testimony more detailed 
suggestions on how it might be modified to be fairer to families and recipients who 
share expenses together. 

I would like to say this, however. In the Second Circuit Court of Appeals, which 
covers New York State, Vermont and Connecticut, a ruling came down in a case en- 
titled Ruppert v. Bowen that has already improved the way this l/3rd rule can be 
administered. A short article about this case is enclosed, and also a longer brief 
of it is attached separately which was taken from the Federal Reporter. In the 
three states I mentioned we already have a better interpretation of the law regard- 
ing rent subsidies by sharing people. Our minimum hope is that this ruling sail be 
applied throughout the nation. 

Our testimony also includes our thoughts on the other items on your agenda today, 
namely, (3) Eligibility requirements for (immigrants and) substance abusers, as 
well as (4) Certain criteria for establishing trusts. It is our considered opinion 
that the SSI Modernization Panel did not come out with the right recommendations 
regarding the matter of trusts. This, too, is a very complicated and legal matter 
which we are vitally concerned about but which cannot be attempted in the short 
time we are allotted. We have, therefore, written our views and submitted them 
in the additional pages to this testimony. 

We wish to publicly commend the Social Security Administration for assembling 
the SSI MODERNIZATION PANEL, and to thank the Panel for the thorough job they 
have done in seeking input from all segments of our society and all geographic 
locations, and for delving into all the hard-to-understand rules and regulations. 
And for their courage in recommending a raise in the benefit level to 120% of the 
poverty level within five years. That would go a long way in helping the dein- 
stitutionalized mentally ill and disabled to stay afloat. In our written testimony 
we give you some examples of the formidable problems these people face every day 
trying to make it in a world that is tough even for those of us who have fared a 
lot better health wise. 



153 



He would, if permitted, like to outline some of the specific problems 
that we have come across as parents of disabled young adults who are on 
the SSI entitlement program. In my own case, I have a daughter currently 
living in California, who has had to move four times in the past year. And 
those moves were not due to her illness, but were due to the inadequacy of 
the SSI benefits, which force her to take inappropriate living situations. 
The benefit rate in California is indeed the highest in the nation, but it 
only allows the rental of a room la a private home with cooking privileges. 
If the renting family and the SSI recipient get along, then it may happen 
that they also share the living room and watch TV together. But It often 
happens that the SSI recipient is restricted to the lone room, cooking on a 
single burner on the community stove (or eating out), and sharing a bath 
that has restrictions on its use. 

And that is the bright side. The truly handicapped might find themselves 
in a gloomy SRO or the streets or park benches. The rental subsidies, like 
Section 8 of the Federal Bousing Act, are badly funded and the wait is 10 
months to three years. For someone coming out of treatment in a hospital 
for serious mental problems, this is not a solution. This is an invitation 
to relapse. 

Many deinstitutionalized persons are living back at home with their families. 
Today it is estimated that SO to 65% of the deinstitutionalized are living 
with aging parents. The bad news is that we are truly aging out and our 
help and support will not be around ten or twenty years from now. It is 
time to think into the future a little and plan for that day when hundreds 
of thousands of disabled persons will be on their own who are now cared for 
by loving families. 

One option for that future is for the disabled to live together and share 
homes, meals, transportation, etc. It is being done today in what is called 
group homes that are run by non-profit organizations. But it is our hope 
that it can be done by private individuals who have learned how to live with 
their illness in the community. But there is a serious impediment to doing 
this under the current rules of the Social Security Administration. Please 
let me explain. 

Two or three or four people can rent an apartment together, split the expenses 
evenly, and each of them receive a total SSI check to cover their monthly ex- 
penses, PROVIDED that each of them is on the lease as rentors and have equal 
liability for the rent. This is the "pro rata" rule. 

BUT, if one of the above owns the house they are sharing and becomes ill and 
is reduced to an SSI check for his support, the income he charges the others 
is considered "unearned" income and will be subtracted from his SSI checkl 
This must be corrected somehow. So that persons who own a home or are left 
a home someday in the future by parents in their will can rent rooms and share 
expenses and thus maintain themselves independently in the community in their 
own home. Everyone should not be reduced to an SSI check and an SRO in some 
dingy neighborhood. Please help us to see that this doesn't happen to the 
children we leave behind. 

And this brings us to the subject of trusts for the disabled, allowed under 
current SSI regulations provided the trust is a "discretionary" trust and 
the beneficiary does not have "control" of the assets. Families of disabled 
children or young or middle aged adults want to leave their homes and other 
assets to benefit their independent children. In doing so they will assure 
their safety and well being. A trust created now or in a Hill is the principal 
means for accomplishing this. He see NO NEED TO CHANGE the way that the SSA 
now deals with discretionary trusts. He think that back payments of retro- 
active SSI payments can and should be put into a similar trust, so that the 
recipient is not forced to spend the money within a six month period or have 
it considered a countable "resource." The only problem with this solution 
is finding a suitable trustee. In the case of children that receive payments 
as a result of the Zebley case, their parents would be the obvious trustees. 
But in other cases, where the lump sum might come from a lawsuit won as a 
result of injury, it might be harder to find a trustee. It also might not be 



154 



equitable to allow an SSI recipient to have a LARGE trust, of say over $300,000, 
AND .an SSI entitlement benefit and Medicaid. This matter merits further study. 
And a fair resolution. Disabled persons must not have to choose between spend- 
ing money foolishly or having no SSI benefit at all. The wise investment of 
family legacies and/or tort settlements can enable at least some of our disabled 
citizens to live in community settings in dignity, at little expense to the 
taxpayers. 

Before these hearings are completed I expect you will hear more about these 
matters from others. He are willing to work with you further to find suitable 
solutions to very complex problems. There are further comments and suggestions 
in the following pages. 

Thank you again for this opportunity to speak to our own personal grievous 
concerns. 

Additional testimony 

Regarding the monthly benefit level, it is obvious to all of us that the federal 
benefit of $434.00 per month is grossly inadequate for living in today's world. 
For this reason individual states often add a supplement, and the government (s) 
have programs to subsidize the rent of such low-income persons. When all 
these items are put together, a person can squeeze by and live in a modest but 
adequate environment. If the disabled or elderly person lives with a family 
or caring and sharing other individual, he or she can squeek by. Then why are 
there so many homeless, mentally ill persons on our streets? 

The answer does not lie totally in the inadequacy of the government programs. 
Sometimes, in the case of the mentally ill, the answer is in their illness and 
the inadequacy of the treatment that they get or they refuse to avail them- 
selves of. There is some serious fixing of the mental health system that needs 
to be done also. The homeless mentally ill will not disappear from our city 
streets until adequate community mental health services exist for them. And 
they avail themselves of these services. 

Many of the so-*called homeless that wander our city streets are simply people 
who have no jobs and therefore no way of paying for a roof over their heads. 
They qualify for no program except a city shelter and a soup kitchen. They 
can't be helped via the SSI program. They should be helped to regain a pro- 
ductive living style. To neglect them is to invite more burden on the taxpayers 
of the country, because the stress of their current lifestyle can precipitate 
a serious breakdown and all its consequent costs. 

ASSET LEVELS 

Regarding the current $2,000.00 asset level that SSI recipients are allowed 
to have there are several points that need to be made. Those representing the 
elderly can address the problems inherent in "spending down" assets to qualify 
for SSI. Our young, chronic mentally ill family members seldom have any 
assets to spend down. Their problem with assets will come in the form of how 
much money they might be allowed to keep from a family inheritance in a will. 
Or how much money they might be allowed to save for a rainy day from a rehab- 
ilitation job that they perform at present. The deinstitutionalized mentally 
ill of today are our children, and their ages range from teens to the forties 
or fifties, if they are still in our care. They are surviving on government 
benefits and our help. We are very fearful that when our help is no longer 
part of the equation, they will join the legions in shelters and soup kitchens. 
We want to avoid that eventuality and are willing to do all in our power to 
prevent it. The laws regarding asset levels don't leave us much room to provide 
for that rainy day. 

At the May 30th, 1989, hearing before a Subcommittee of Human Resources - this 
same committee - Louis D. Enoff, Deputy Commissionery for Programs, SSA, said 
that "an individual can own resources of considerable value and still be eligible 
for SSI. For example, a person's total net worth could be $110,000; this could 
include a home and a car." At today's prices that arbitrary amount could double. 
But how does one pay the mortgage on such a home and the car payments on a monthly 
check of $434.00 per month (or in New York State on $520.00 a month)? 



155 



Even if a disabled or elderly person were GIVEN a house and a car, the 
taxes and upkeep would be impossible on an SSI check. The SSI recipient 
would be obliged to sell the house and move into a rental. Immediately 
upon the sale of the house the SSI recipient would no longer be qualified 
to receive a penny from SSI because he would now have that asset converted 
to cash and the amount would be way over the $2,000.00 asset level. Now the 
"spending down" process would start. And no SSI checks would be available 
until that cash was spent down to the $2,000.00 level. 

As we touched upon before, the only way that a person on SSI could continue 
to maintain himself in his own private home would be if others shared the 
home and shared the expenses. We desperately want Congress to pass a law 
to make that possible. A multitude of laws have already been passed, and 
after this hearing some new ones will be added. Please include in this package 
the ability of disabled and elderly persons on SSI to be allowed to "share" 
their hones by renting out a room or two. Any "profit" made on such an arrange- 
ment could be legitimately deducted from the owner's SSI check, but first the 
mortgage, taxes, heat, electric and phone bills must be pro-rated and shared 
equally. 

All we want is for our disabled adult children to be able to survive in dignity. 
Not on the streets. To be forced to sell a family home because of glitches 
in the regulations regarding "unearned" income is a travesty. It will cause 
more homelessness eventually, if you don't change the regulations/laws now. 

SSI and Substance Abusers - by Jean Little, AH I -NY s Member 

This is not a simple subject to tackle, but I have some definite ideas on the 
subject, born of experience with a family member. If a person is simply an 
alcoholic or substance abuser, he or she is not handicapped. That person is 
addicted. And addictions can be cured through therapy and abstenance, after 
which the person can resume his 'her place in society as a working member. 
To achieve sobriety may take special help, and while receiving that help, 
government subsidy for living may be in order. But checks should not be 
mailed out to persons simply because they are "alcoholics." 

There is another category of person, however, who is both handicapped and a 
substance abuser. This person may legitimately receive a check for the handi- 
capping condition, and then use it foolishly for alcohol. This can happen 
most easily when the supporting family pays the bills for food, and rent, and 
the handicapped person gets a reduced check under the l/3rd rule. The check 
is too small to support the individual, but large enough for a couple of good 
benders that can result in rehospitalization - in the case of mentally disabled 
persons especially. 

It is too late for my family to find a solution to this problem. This behavior 
led to my middle son's death in 1969. So I am well attuned to the dangers of 
allowing such individuals to have control of any funds at all. However, even 
the mentally ill oust learn how to cope with both their illness and their 
addiction (s) in this day and age of deinstitutionalization. It is a sink or 
swim affair. Many sink. Perhaps a better way can be found to help them learn 
to manage money. There is certainly a glitch in the system that just sends 
out a check and does not expect an accounting, especially for persons who are 
mentally ill and addicted. I suspect that Congress does not want to face the 
fact that the checks are too small to provide adequate help. 

Today we are here to face facts. The simple truth is that you cannot live on 
an SSI benefit, but you can get drunk on one - and maybe lose your life. 
Such irresponsible people often have a representative payee. But the check 
is made out to both the recipient and the representative payee, and the banks 
don't seem to pay any attention to who opens the savings account or who with- 
draws the money. I was manipulated by my son into allowing him to have con- 
trol over his SSI money. Since he was saving most of it toward the day he 
would have his own place, I thought I was doing the right thing. But now and 
then he misused some of it. And I am sure plenty of others do too. How to 
prevent this is the question. Tighten up the rules for the representative 
payee. And inform banks that an account can only be opened by the representative 
payee, not the actual recipient. 



156 



TRUSTS and the RUPPERT v- Bowen case 



The regulations for SSI say that money in an irrevocable discretionary trust 
cannot be counted as an asset since the SSI recipient does not have control 
of the money, only the trustee has control. And the "income" from such a 
trust cannot be counted until it passes to the individual, and if paid bfc the trustee tc 
third parties, i.e. landlords, mortgage holders, the electric company, then 
it cannot be counted as "unearned" income but falls under the "In kind support 
and maintenance rules." The Ruppert v. Bowen ruling in the Second Circuit 
Court of Appeals says that if an SSI recipient pays l/3rd of their federal 
benefit for rent, then they need not suffer any SSI deductions if they receive 
a rent supplement from family or trust. This means that a relatively small 
trust could help with the support of a recipient by paying 2/3rds of the rent 
or some part thereof. Before this ruling, small trusts were restricted to pay- 
ing only for "supplemental needs," which meant anything but rent, food and 
clothing. This is why we are looking forward to the Ruppert ruling being 
applied to everyone on SSI. 



Reprinted from Vox Populi, the voice of the people, published 
by the Mid Hudson Legal Services, Inc. of Poughkeepsie.NY 

ATTENTION 

SSI RECIPIENTS 

YOU MIGHT BE 

ENTITLED TO MORE 

SSI 

THE NEW RULE IN N.Y. 



If you rent from a parent or 
child, and your SSI has been 
less than the full rate because 
Social Security charged you 
with a "rental subsidy" due to 
your low rent, you may be en- 
titled to receive more SSI retro- 
active to July 1990. 

As a result of a court decision 
called Rupoert v. Bowen. if you 
rent from a parent or child, and 
pay at least $165 per month 
(for 1993) ($160/month for 
1992; $156/month for 1991; 
and $ 1 49/month for 1 990) , So- 
cial Security cannot charge you 
with receiving a rental subsidy. 
If you now buy and prepare 
your food alone, you could re- 
ceive $520 SSI per month in 
i 1993 (the living alone rate). 



Ruppert applies retroactivelyto 
decisions made by Social Se- 
curity on or after July 1 6, 1 990. 
If you think you might qualify for 
more SSI, go to your local So- 
cial Security office, and request 
re-evaluation under the Rupoert 
Acquiescence Ruling #90-2(2). 



The only way that a trust can be used to protect large awards for damages 
would be in the same way as above, by setting up a discretionary trust with 
somebody else as trustee, a parent or a sibling. Provided the award was 
under a certain amount, like $200,00(3, I can see that putting it in a trust 
would be a good way to assure that a supplement to the SSI benefit would always 
be available to the recipient. If the award were much higher, and the income 
alone from the trust was more than the SSI benefit amount, it would seem to be 
wrong for such a beneficiary to be eligible for the full SSI benefit. Awards are 
set high for the purpose of taking care of the injured person. No government 
benefits would seem to be in order in such a case. Special rules will have 
to be written for such cases. 

Thank you for your consideration of SSI matters at this time. Our disabled 
citizens and the elderly on low pension or no pension certainly need the program. 
And it needs to be improved. I hope the benefits can be brought to the poverty 
level. And if two people in a family are both handicapped, they should each 
receive the same benefit. Just because they are married they should not have 
to live on 1 and S benefits. 



Enclosures include Ruppert v. Bowen decision, TAKE ME TO YOUR LAWYER, a handbook 

on SSI and Trusts for the Disabled, and ALL IN MY FAMILY, a story of a MICA patient. 



157 



TESTIMONY OF EVELYN MORTON 
AMERICAN ASSOCIATION OF RETIRED PERSONS 

The American Association of Retired Persons (AARP) submits the following statement for 
the record on the Supplemental Security Income (SSI) program. Improvement and expansion 
of SSI is an important priority for the Association. 



BACKGROUND 

Implemented in 1974 to reduce poverty among the poor, aged, blind and disabled, SSI 
provides a monthly cash benefit to eligible low-income persons. In 27 states, the federal 
benefit is augmented for some beneficiaries by a state supplement. Even with this 
supplementation, the combined benefits generally fall below the poverty line. 

Since 1974, Congress has made a number of improvements in the SSI program. As a result, 
some unduly restrictive eligibility requirements were removed and modest benefit 
improvements implemented. However, additional reforms are needed to significantly reduce 
poverty among the aged, blind, and disabled. 

In 1990, then Social Security Commissioner Gwendolyn King appointed a panel of experts 
headed by Dr. Arthur Fleming to study the SSI program and recommend changes. Called 
the SSI Modernization Project, the group's review of the program was the first since SSI 
began, more than 15 years earlier. 

The SSI Modernization Project's preliminary suggestions were published in the Federal 
Register for comment in 1991. Based on the 14,000 responses received, the panel issued a 
final report in September 1992. It contained over 50 recommendations covering 20 
categories. Some suggestions were broad in scope and others affected specific aspects of the 
program. To date, Congress has not acted on these proposals. We are pleased that the 
Committee is examining them today. 

AARP believes the most sorely-needed changes in SSI are: 

► increasing the federal benefit level to at least the poverty line; 

► raising the assets limit to reflect growth in the economy; 

► continuing an aggressive outreach effort so that all SSI-eligible persons know about 
and can participate in this important program; 

►• eliminating the rule that reduces benefits for those who live in a household with 

another; and 

► ensuring that SSA is adequately staffed so that SSI applications are processed in a 
timely manner. 

Many of these recommendations are part of H.R. 2676, introduced by Representative Carrie 
Meek. 



POVERTY AND BENEFITS LEVELS 

SSI recipients are among the poorest of the poor. Since the federal cash assistance provided 
is less than the federal poverty level, SSI recipients - especially those in states that do not 
adequately supplement the federal benefit level ~ live on less than a subsistence level of 
income. 

While the overall poverty rate for older Americans has declined, the incidence of poverty 
among many subgroups is shocking. For example, according to Census Bureau data for 
1992, about 35 percent of all Black persons 65 and over lived in poverty, and older Black 
women experienced a slightly higher poverty rate. 



158 



The Modernization Panel recommended a phased-in increase in the federal benefit to 120 
percent of poverty. The Association recognizes that this recommendation would be difficult 
to achieve in this period of fiscal austerity. However, we believe that the present benefit 
level is too low and needs to be raised. 



THE ASSET & INCOME TEST 

The Overall Limit 

Unfortunately, many whose monthly income is sufficiently low to qualify for an SSI benefit 
are excluded from the program because their "countable" assets exceed the allowable limit of 
$2,000 for an individual or $3,000 for married couples. Although certain assets such as a 
home and a wedding ring are excluded, it is very difficult for poor persons to meet asset 
criteria that were developed in 1972 and revised only once. Another problem is that 
excluded assets under SSI are more narrowly defined than in other means-tested programs 
such as Food Stamps. 

In 1988, Brandeis University conducted a study for AARP of individuals found to be 
ineligible for SSI. They found that 34 percent of older persons who meet the income 
requirements are disqualified by their asset holdings. Moreover, a substantial number of 
these income-ineligible older persons have countable assets relatively close to the asset test 
limit. 

Satya Kochhar's study of all those denied SSI in 1989 because of excess resources ("Denial 
of SSI Applications Because of Excess Resources", Social Security Bulletin . Summer 1992, 
pp. 52-56) shows that 37 percent were applying for aged benefits. Their total assets (liquid 
and non-liquid) had a mean value of $10,500. Most often, the 65 and over ineligibles had 
excess bank accounts, but 64 percent had accounts that were less than $4,000 over the limit. 
Cash was the next most common factor leading to disqualification. Most of those with 
excess cash had less than $1,000 over the limit. An automobile was the third most common 
asset causing ineligibility. About 58 percent of these ineligibles owned a vehicle that was 
less than $2,000 over the $4,500 exclusion for automobiles. 

The SSI panel recommended raising the resource limit to $7,000 for an individual and 
$10,500 for a couple - slightly above the thresholds that would be in affect now if the 
thresholds had been adjusted annually for inflation. Being able to keep a larger amount of 
resources would be particularly helpful to older recipients who are likely to face an 
unforeseen medical emergency or need to replace a broken appliance or a leaky roof. 

Since the SSI Modernization proposal eliminates existing resource exclusions, the proposed 
increase is not as large as it might appear at first glance. AARP believes the new level 
would not alter the fundamental nature of the SSI program. 

Specific Assets 

In addition to adjusting the asset limit for inflation, the Association recommends changes in 
the treatment of specific assets. The face value life insurance limit should be increased from 
$1,500 to $2,500. Currently, a person can exclude a life insurance policy with a face value 
only up to $1,500 as an asset for SSI eligibility purposes. Raising the limit to $2,500 would 
give older recipients some peace of mind knowing that their loved ones would be better 
protected after their death. The Association also recommends that the burial fund limit be 
raised in tandem with the increase in the face value of life insurance. 

AARP also supports increasing the current exclusion for dividend and interest income to 
$200. This change would be particularly important to older Americans, who greatly value 
"saving," even if these savings are small. With this increase, recipients still cannot earn 
more than $17 per month of dividend and interest income. 



159 



CM-KIND SUPPORT AND MAINTENANCE 

In-kind assistance, unless provided by a nonprofit organization or specifically excluded by 
statute, is counted as income in determining SSI eligibility. An SSI recipient who resides in 
the home of another, usually a family member, and does not contribute his fair share, is 
usually subject to one-third reduction in benefits. This reduction occurs regardless of 
whether the recipient is contributing his entire SSI benefit. The reduction puts an 
individual's benefit level at about half the poverty line. 

AARP supports the Modernization Panel's recommendation to eliminate the one-third 
reduction. Although the proportion of SSI recipients whose benefit level standards are 
reduced because they live in the household of another is low, those affected are hurt because 
they do not receive a full benefit. 

In addition, the in-kind support and maintenance rule is a barrier to caregiving. It penalizes 
the well-meaning family that wants to help a relative who is frail or has a disability. It is 
inconsistent with the American view of the importance of family. 

Further, the rule does not make economic sense. It is highly unlikely an individual with a 
reduced SSI benefit will accumulate the resources to begin paying his pro-rata share. 
Moreover, some individuals will end up in a care facility, which costs Medicaid even more 
than the full SSI benefit. 

The in-kind maintenance and support rule is an administrative nightmare for SSA. Collecting 
the information and enforcing the rule is time-consuming and diverts agency resources from 
other tasks, such as helping SSI beneficiaries in other ways. Currently, SSA's instructions 
regarding the rule take up 100 pages of the instruction manual. Also, verification of a 
recipient's living arrangement can occupy up to one-third of some SSA employees' time. 



AGENCY STAFFING 

In order to properly serve the SSI population, the Social Security Administration (SSA), 
which administers the SSI program, must be properly staffed. No program can achieve its 
goals if those who administer it lack the resources they need. Inadequate resources cannot be 
overcome even by the most well-intentioned employees. Even a dedicated staff can get worn 
down by pressure and frustration. 

SSI recipients and applicants are among the first to notice the effects of chronic 
understaffing. The mounting disability backlog is the most visible and distressing symptom 
of this understaffing. For those awaiting SSI disability benefits, the wait is particularly 
cruel. Not only is their income limited, but they lack the resources to sustain themselves 
until a determination is made. If the initial determination is negative, they must wait even 
further until their appeal is heard. This delay exacerbates an already difficult financial 
situation. 

The increase in the disability backlog comes at the worst possible time as states, seeking to 
balance their budgets, either terminate or severely reduce their general public assistance 
programs. For more Americans than ever before, SSI has become the only safety net. 

AARP believes SSA must receive adequate resources to reduce the disability backlog and 
must give SSI applicants the assistance they need in completing the complex application 
form. 



FUNDING FOR OUTREACH ACTIVITIES 

Since 1989, AARP has sponsored SSI outreach projects throughout the United States. It is 
estimated that only about half of those 65 and over who are eligible for SSI actually 



160 



participate in the program. The success of AARP's outreach activities indicates that program 
enrollment will rise as knowledge increases. However, in a time of tight resources, funds 
will not be used for outreach unless money is specifically earmarked. 

AARP believes that the Modernization Project's recommendation to earmark a portion of the 
administrative budget for outreach is the only way to ensure meaningful outreach. 



LINKAGE OF SSI AND THE MEDICAID PROGRAM 

AARP agrees with the Modernization Project's recommendation to strengthen the Linkage 
between SSI and Medicaid. We think that everyone should have access to basic health care, 
which is best achieved through comprehensive health care reform, including reform of the 
way health care is financed, rather than through minor adjustments to our present fragmented 
system. However, because of the extreme need of the SSI population, improvements in 
access for this group should not be delayed pending broader reform. 

AARP recommends that the "209(b)" exception be eliminated. This would make Medicaid 
newly available to over 400,000 low income individuals living in the twelve states that 
require the blind, the aged and those with a disability to meet criteria for Medicaid eligibility 
which are more restrictive than the criteria for SSI eligibility (the other 38 states 
automatically grant Medicaid to persons eligible for SSI.) Medicaid coverage is essential for 
this population, despite the fact that many individuals are technically eligible for Medicare. 
Many of them cannot use their Medicare benefits because they cannot afford the coinsurance 
and deductibles, and the Qualified Medicare Beneficiary program which is supposed to pay 
those expenses for them (plus the Medicare premiums which otherwise come out of their 
already meager Social Security checks) has not been reaching all who are theoretically 
eligible due to inadequate outreach efforts. In addition, Medicaid may cover costly services 
that are not covered by Medicare such as long-term care, extended home care, outpatient 
prescription drugs and dental care. 

However, such a change must be accompanied by a requirement that the 209(b) states which 
now permit spend-down for the aged, blind, and disabled continue to do so, at least for the 
population that is currently receiving benefits. In the context of reforming Medicaid, AARP 
also supports requiring all states to implement medically needy programs for persons of all 
ages. 



DISABILITY & WORK INCENTIVES 

The focus of SSI has always been to provide benefits to people with very low income and 
assets. Undoubtedly, disability and poverty go together. Since the inception of the SSI 
program in 1974, the population of beneficiaries receiving benefits based on disability has 
grown from 1.2 to over 3.4 million. (According to a Harris study completed in 1980, one- 
half of all Americans with disabilities had incomes of $15,000 or less.) AARP agrees that 
there must be adjustments in the SSI system for people with disabilities. In particular, there 
should be more flexibility in the system for those receiving SSI who wish to try to return to 
work. 

AARP agrees with the Modernization Project's recommendation to change the definition of 
Substantial Gainful Activity (SGA) in the SSI program for people with disabilities who 
require significant support services to work. The definition should include the statement: 
"To establish initial eligibility to SSI an individual would be considered to be earning at the 
SGA level only if he is earning above the SGA level without significant support services." 

This change would help to eliminate the contradiction in disability policy that first requires 
an individual to prove he is totally unable to work and then, once he is found eligible for SSI 
disability benefits, encourages him to re-enter the workforce. The proposed statement 
recognizes that many people with disabilities want to work but find it impossible to do so 



161 



because they would not receive the necessary financial and medical assistance. Changing the 
definition for those who require significant support services to work would encourage those 
individuals to try to do so. Additionally, for the population already working and scraping by 
without health insurance and with very low income, this change would provide 
encouragement to remain in the workforce. 

In addition, the Association supports the following work incentive recommendations proposed 
by the Modernization Project: 

► Work incentive demonstration progra ms should be undertaken . AARP recommends 
specific two-year limits on these demonstrations. 

► Increase the monthly earned income exclusion from $65 to $200 . This increase 
acknowledges that a person with a disability has work expenses that are a significant 
portion of his income and may prevent him from attempting to enter the labor force. 
This would also eliminate the disparity between the blind, who can exclude all work 
related expenses, and people with other disabilities. 

► Eliminate Continuing Disability Review (CDRs) triggered by work activity and defer 
scheduled medical reviews for working recipients for three years after beginning 
work . A person who participates in the SSI Section 1619 program is subject to CDRs 
when: 1) his earnings make him ineligible for SSI cash benefits or Medicaid, or 
conversely, when he becomes eligible for benefits or Medicaid again; and 2) when he 
is within 12 months of initial eligibility for 1619. It is thus possible for an individual, 
because of income changes, to be subject to numerous CDRs over the course of one 
year. This change would protect SSI recipients who try to work from an 
unreasonable number of evaluations of their status. It also eliminates some of the 
paperwork burden for the administrators. 

► Treat unemployment compensation, workers' compensation, sick and other similar 
benefits received because of recent work activity as earned income . Each of the 
benefits replaces earnings and therefore should be considered earned income instead 
of unearned income. This would enable SSI recipients to keep more of these benefits 
since earned income receives more favorable treatment under SSI than unearned 



Eliminate the regulatory time limit for completing the plan for achieving self-supp ort 
(PASS) . An individual who is in a training program that lasts longer than the 
regulatory limit of 48 months or an individual with a disability that prevents him from 
attending a program full time would be unable to complete a PASS. Eliminating the 
time limit would allow more people with disabilities to take advantage of this 
opportunity. 

Make all individuals who receive benefits based on age eligible for all work 
incentives . Some older individuals find it financially necessary or socially desirable 
to return to the workforce after a period of non-work. Older individuals should be 
allowed the same opportunities to work as other individuals in the program. 



REPRESENTATIVE PAYMENT 

Of the panel's recommendations regarding representative payees, AARP supports mandating 
training and monitoring of representative payees, authorizing sufficient funding to implement 
the program, requiring periodic documentation to support annual accountings, recovering 
misused funds from the monthly check of representative payees receiving benefits in their 
own right, and prosecuting representative payees who misuse funds. AARP also urges that 
there be a presumption when an overpayment has occurred that the beneficiary is "without 
fault." 



162 



Unfortunately, some representative payees mishandle the recipients' funds and others simply 
do not understand the SSI program. A beneficiary with a representative payee is, by SSA's 
definition, incapable of handling his funds. These beneficiaries cannot be expected to know 
when representative payees are using their funds inappropriately, nor should these 
beneficiaries be expected to figure out an appropriate remedy. SSA must monitor 
representative payees to ensure that vulnerable beneficiaries are protected. Representative 
payees should be required to provide documentation to support their annual accountings. 

When a disabled recipient with a representative payee is charged with an overpayment, SSA 
applies a presumption that the recipient and the payee are jointly liable for repayment. 
Holding the recipient jointly liable with the representative payee is unjust. A representative 
payee is appointed because SSA has determined the recipient cannot manage his affairs -- 
often because he is too young or mentally unable to do so. 

Unless a waiver is requested, when an overpayment occurs, SSA can recoup the overpayment 
from the recipient's future benefits. It is up to the recipient with the disability or the 
representative payee to request this waiver. However, the representative payee is not likely 
to request a waiver because, if recovery from the recipient is waived. Social Security may 
recover the overpayment from the representative payee. This situation needs to be corrected. 



SSI ADVISORY COUNCIL 

The Modernization Project called for a separate advisory council on SSI. The Social 
Security Advisory Council could evaluate the program when it meets on a quadrennial basis, 
but the Advisory Council has responsibility over a range of programs and understandably has 
limited time to give each one. A separate council would be in a position to call for 
additional SSI changes as well as be able to determine the progress which has been made on 
the recommendations of this current panel. 



CONCLUSION 

The SSI rules and benefit levels are similar to the ones adopted almost 20 years ago when the 
program began. The SSI Modernization Project undertook a comprehensive examination of 
the program and made specific recommendations for its improvement. It is up to Congress 
to implement some of those recommendations. 



163 




AMERICAN CEMETERY ASSOCIATION 

Three Skyline Place, Suite 1111 • 5201 Leesburg Pike • Falls Church, Virginia 22041 
Phone: (703) 379-5838 • Toll Free 1-800-645-7700 • FAX (703) 998-0162 



Stephen L Morgan, CCE 
Executive Vice President 



October 22, 1993 



The Honorable Harold E. Ford 

Chairman 

Subcommittee on Human Resources 

Committee on Ways and Means 

U.S. House of Representatives 

Rayburn House Office Building 

Washington, D.C. 20515-6351 



Re: SSI Modernization Project 



Dear Chairman Ford: 



The American Cemetery Association (ACA) respectfully submits its views 
regarding the Supplemental Security Income Modernization Project and the oversight 
hearings your Subcommittee is presently conducting. We appreciate this opportunity 
and request that our testimony be made part of the permanent hearing record. 

The ACA represents over 2,000 members including private, religious, and 
municipal cemeteries throughout the United States and in twenty foreign countries. 
Our concern with the SSI Modernization Project is limited to a proposal in the Final 
Report, as published in the Federal Register at 57 FR 40732 et seq.. to "streamline" 
certain resource exclusions. 

Specifically, the Final Report proposes the elimination of the current burial 
space and burial fund exclusions in determining SSI recipient eligibility. The current 
dollar resource exclusion of $2,000 per individual and $3,000 per couple would then 
be increased to $7,000 and $10,500 respectively as an ambiguous offset to the loss of 
the burial exclusions (57 FR 40760-61, 40763). While ACA agrees that the current 
dollar levels are unrealistically low and should be increased, we oppose the 
elimination of the burial space/fund exclusions. 

When Congress enacted the SSI burial exclusions into law through P.L. 97-248, 
the Tax Equity and Fiscal Responsibility Act of 1982, it acknowledged that "many 
elderly Americans.. .(were) being faced with the macabre choice between lifesaving 



GIARDIANS OF OIK NATION'S HERITAGE 



164 



welfare assistance and giving up their plans for disposition of their bodily remains." 
Section 185 of this Act created the burial exclusions to relieve "an insensitive and 
appalling test of eligibility." (Statement of Sen. Howard Cannon, 128 Cong. Rec. 
S8943, July 22, 1982). 

The highly personal choices involved in making funeral and burial 
arrangements are based on a variety of factors including religious considerations and 
should never be subjected to government intrusion. These factors were implicitly 
recognized by the SSI Modernization Project Final Report when it stated that the 
reasoning "behind the resource exclusions is that certain property is so essential to 
one's well being.. .that its owner should not be expected to sell it and use the cash to 
meet day-to-day living expenses." (57 FR 40759-60). 

However, the Final Report then proceeds to blur the fundamental distinctions 
between "living expenses" and funds set aside for the "final expenses" of a funeral and 
burial by recommending that an increase of excludable resources to $7,000 and 
$10,500 will provide an offset for the elimination of the burial space/fund exclusions. 
These kinds of resources serve two entirely different purposes: the one for living and 
the other, quite literally, for death. 

The Report also noted that some of its panelists expressed concern over 
eliminating the exclusions because some SSI recipients would be required to dispose 
of these assets to maintain their eligibility (57 FR 40761). Yet in advocating the 
termination of the burial exclusions, the Report provides no data or evidence as 
justification, but only a conclusory observation that administrative time and expense 
would be saved. In fact, a new layer of bureaucracy would be created by the need to 
evaluate the worth of the asset; which were previously excluded. 

The ACA suggests an alternate approach to streamlining the resource 
exclusions. We recommend amending Section 1613 of the Social Security Act by 
combining the burial space and burial fund exclusions into a single resource exclusion 
called "burial assets." This exclusion would include but not be limited to cemetery 
property, merchandise and services, cemetery purchase agreements, trusts, life 
insurance policies, annuities, or any other similar arrangement. Items currently 
recognized under "burial spaces" would continue to have no dollar limitation. 
Likewise, accumulated interest or earnings on the assets would also continue to be 
excluded as resources. 



165 



In addition, the ACA recommends that the current $1500 limit on burial funds 
should be eliminated (in a manner similar to the existing SSI treatment for a home, 
personal effects and other items) provided that these funds are related to an 
irrevocable burial or funeral contract. We believe that any potential abuse of this 
exclusion by "sheltering" funds for purposes of obtaining SSI benefits will be removed 
through a requirement for irrevocable agreements. 

Finally, the ACA believes that the elimination of the burial exclusions will 
ultimately shift the cost of burials to the government when present and future SSI 
recipients are given "incentives" not to assume responsibility for their own funeral, 
interment and memorialization arrangements. 

For these reasons, the American Cemetery Association respectfully urges the 
Subcommittee to oppose any proposal to eliminate the SSI burial space and burial 
fund exclusions. Thank you. 



Sincerely, 




Stephen L\ Morgan, CCE 
Executive Vice President 



SLM:mws 



166 



TESTIMONY OF GLENN M. PLUNKETT 
AMERICAN FOUNDATION FOR THE BUND 

This statement is submitted for the record on behalf of the American Foundation for the 
Blind relative to the Subcommittee's October 14, 1993 oversight hearing on the Supplemental 
Security Income (SSI) Program and recommendations made by the SSI Modernization Panel, as well 
as other subject matters concerning the program. 

The mission of the American Foundation for the Blind is to enable persons who are blind or 
visually impaired to achieve equality of access and opportunity that will ensure freedom of choice in 
their lives. AFB accomplishes this mission by taking a national leadership role in the development 
and implementation of public policy and legislation, informational and educational programs, 
diversified products, and quality services. 

SSI has benefited millions of recipients over the years and has gone a long way in providing 
a safety net to keep them from absolute impoverishment. However, the program should be updated 
to take into consideration the needs of people who have little in the way of income and resources 
in the current economic and social realities. Implementation of the recommendations by the SSI 
Modernization Panel would bring the program generally in line with the current economic conditions. 
However, any program changes concerning income and resources and other measures of need should 
be indexed to provide for future changes. 

One of the more important program needs is sufficient staffing in the Social Security 
Administration to handle the program in an efficient and timely manner so that people who are in 
need will receive benefits to which they are entitled without further hardship. This is one of the major 
recommendations of the SSI Modernization Panel and one with which we heartily agree. 

We have excerpted the more significant options reported by the Panel and have given our 
recommendations and comments on each of them; indicating whether legislation would be needed 
or whether the suggestion could be accomplished through the regulatory process. We have noted that 
numerous recommendations made by the Panel could be accomplished in whole or in part through 
the regulatory process. In those cases we cannot see why the Department of Health and Human 
Resources has not proposed regulations to improve the program as quickly as possible. For example, 
the situation concerning "deeming" of all resources, after a set aside for a parent(s), to the 
disabled/blind child(ren) when there are other children in the family who are not disabled/blind is one 
that is inequitable and should have been corrected at the program's inception. 



Summary of the More Significant Options Reported by the 

SSI Modernization Project 

and Recommendations for Improvement by the 

American Foundation for the Blind 

for Congressional Consideration 



Panel Recommendations\AFB Comments 

1. Increase the Federal benefit standard for an individual, in 5 equal annual increments, to 120 
percent of poverty guideline. Keep the couple's benefit standard at 150 percent of that for 
individuals. 

Comment: Requires legislation. Should go to poverty level in one step and next to 120% of 
poverty. Should give couples twice individual rate or at least 175% because of extra needs of 
blind/disabled/aged. 

2. Eliminate the concept of "holding out" in defining a spouse. 

Comment: Requires legislative change . Agree that it should be done. However, both 
members of a married SSI couple should be treated as an individual. See preceding option. 

3. Give each member of a couple a full set of earned income exclusions. 

Comment: Agree. If each member treated as an individual, should receive exclusion as 
suggested. 



167 



4. Adopt the current "earned and unearned" income formula for use in all parent-to-child deeming 
situations. Deduct itemized special expenses of a disabled child before deeming parental income. In 
deeming parental resources, exclude $2,000 (indexed) for each ineligible child. 

Comment: Should be done. The Act permits the Secretary to do such by regulations. 
Deeming of parental income and resources are mandated in the Act "... except to the extent 
determined by the Secretary to be inequitable under the circumstances." May require 
legislative change for deducting special expenses of disabled/blind child. 

5. In parent-to-child deeming, treat as earned income benefits intended to replace a parent's earnings 
(e.g., unemployment, worker's compensation, and disability and survivorship social insurance benefits ). 

Comment: Should be done. Would require some legislative change as to what is "earned 
income". 

6. In-Kind Support and Maintenance: Eliminate consideration of in-kind support and maintenance 
as income. 

Comment: Should be done. Requires legislative action. Would encourage people to live with 
others and help keep people out of institutional care situations. 

7. Resources: Increase resource limits to $7,000 and $10,500 with fewer resource exclusions. 

Comment: The amounts are too low. They should be increased and indexed. Would need 
some legislation but much could be done by regulation. 

8. Change all periods for time-limited resources exclusions to 12 months. 

Comment: Should be done. Can be done by regulations. Secretary can prescribe period or 
periods of time for disposal of resources. 

9. Change the calculation of overpayment resulting from excess resources. 

Comment: Desirable to do. Would require legislative change. This would permit the 
Secretary to recover overpayment, because of excess resources, only to the extent of value 
of excess resources. 

10. Disability Issues: Redefine "substantial gainful activity" in the SSI program to recognize that 
persons who need substantial support services in order to work are not performing substantial gainful 
activity, and study the feasibility of: 

(a) eliminating use of substantial gainful activity in both the SSI and the disability insurance programs; 
and 

(b) formulating disability criteria in terms of being disadvantaged in participating in major life 
activities. 

Comment: This is not an issue for people who are blind and in receipt of SSI program 
payments since there is no "substantial gainful activity" in SSI for people who are blind. Also, 
people who are blind have a definition of blindness in the Act 

However, SSI payments should be made on the basis of income and resources tests and SGA 
should not be a part of SSI criteria for "disabled" individuals. Requires legislation. 

11. Work Incentive Options 

(a) Raise the earned income exclusion to $200 plus two-thirds of any remaining earned income. 

Comment: Should be done but should be indexed to keep pace with cost of Irving/inflation. 
Needs legislation. 

(b) Eliminate continuing disability reviews triggered by work; defer scheduled medical reviews for 3 
years after work begins. 

Comment: Also, should eliminate any disability reviews where disability or blindness could 
never be expected to improve. Could do some by regulation. 



168 



(c) Treat as earned income: unemployment compensation, workers' compensation, sick pay, and 
similar benefits related to recent work activity. 

Comment: Should be done. Requires legislation. 

(d) Allow aged individuals to be eligible for all work incentives. 

Comment: Needs legislation. There should be no age discrimination in the SSI program. An 
aged person should be given all the work incentives given to people under age 65 without 
special requirements concerning work prior to age 65. 

Discriminates against aged people as now written. 

(e) Disregard deemed income of an ineligible spouse when determining continued Medicaid eligibility 
under section 1619(b). 

Comment: Should be done . Requires legislation but if each person in a 'couples" situation 
was treated as an individual this could be done anyway. 

(f) Eliminate the time limit for completing a plan for achieving self-support. 

Comment: Desirable and can be done by regulations. 

(g) Require SSA to make a decision on a plan for achieving self-support within 30 days. If there is 
no decision within that time, assume the plan is acceptable. 

Comment: Could be done by regulation. Should be done immediately. 

(h) Require States which supplement regular SSI payments to supplement payments under 1619(a). 

Comment: Requires legislation. Desirable to provide health care service and encourage 
working. 

(i) Provide Medicaid under section 1619 to all working individuals. 

Comment: Requires legislation but medical care should be provided. 

12a. In both SSI and the SSDI programs, eliminate the reconsideration level of appeal; and provide 
opportunity for a face-to-face interview with the decision-maker prior to issuing a disability denial. 

Comment: Desirable and should be done as quickly as possible for both SSI and SSDI since 
backlogs in processing appeals are building at ever increasing rates. Need legislation 

12b. Establish 90 day time limits which, if exceeded, would result in benefits payments not to be 
considered overpayment Apply such limits to: initial SSI disability determinations; completing cases 
at the administrative law judge level; and completing cases at the Appeal Council level. Study the 
effects after 4 years of experience. 

Comment: Needed quickly in both SSI and SSDI programs since processing times are delaying 
initial payments, and appealed cases, excessively and creating hardships for those in need. 

Need legislation. 

13. Representative Payment: Some recipients need representative payees to protect them. There 
should be specific recruitment, training and monitoring of representative payees, and provision of 
reasonable compensation to non-relative non-custodial payees out of administrative funds. 

Comment: Needs legislation to accomplish this as stated, especially in the training and 
compensation out of administrative funds. 

14. PROGRAM LINKAGE ISSUES: Medicaid . Require all States to use SSI eligibility criteria and 
mandate Federal determinations of Medicaid eligibility. 

Comment: This is needed. Requires legislation. In some States the criteria for medicaid is 
more restrictive than SSI criteria and people on SSI may not be eligible for Medicaid. 

15. Continue Medicaid coverage when SSI eligibility is lost solely due to a calendar-related income 
fluctuation. 



169 



Comment: Agree. Could be partially effectuated by regulations but would need some 
legislative change. 

The American Foundation for the Blind appreciates this opportunity to present our views 
concerning the Supplemental Security Income program, and to make recommendations that if 
implemented will improve the lives of those who are dependent upon SSI. 



Respectively Submitted, 



Glenn M. Plunkett 
Governmental Relations Specialist 
American Foundation for the Blind 



170 



TESTIMONY OF ANDREW KOSKI 
BROOKDALE CENTER ON AGING OF HUNTER COLLEGE 



Good morning, Chairman Ford and other distinguished 
members of the House Ways and Means Subcommittee on Human 
Resources. My name is Andrew Koski. I am the Public Policy 
Coordinator of the Institute on Law and Rights of Older Adults, 
part of the Brookdale Center on Aging of Hunter College. The Law 
Institute researches the laws and regulations pertaining to SSI and 
other entitlement programs; provides publications that explain 
these programs for agencies serving the elderly; conducts seminars 
on public benefits; and represents individuals who wish to appeal 
denials, terminations or reductipns in benefits. Our testimony is 
based upon fifteen years of experience with the SSI program. 

First, we want to commend the Committee for holding today's 
hearing. SSI is a program integral to the survival of over five 
million people in the United States which supports the health and 
well being of disabled children and adults and impoverished older 
adults by providing vital income support. Although SSI has been a 
successful program, improvements to the program are long overdue. 

My testimony will address the recommendations of the SSI 
Modernization Project. This Project conducted an exhaustive study 
of the SSI program, held numerous hearings across the country and 
developed sound recommendations for improvement of the program. 
These recommendations must be acted upon so that this country's 
poor elderly, visually impaired and disabled individuals can live 
a better life. 

The Law Institute recommends that the following improvements 
be made in the SSI program. 

I. BENEFIT LEVELS 

A. Federal Benefit Amount. Increase the federal benefit 
levels to 120% of the poverty guideline over 5 years. Although the 
Law Institute would prefer to have the benefit levels raised to 
125% of the poverty guideline over a 3 year period, we believe that 
the Modernization Project's recommendation of raising the level to 
120% over 5 years is a sensible and worthy goal in this time of 
high federal budget deficits and decreased funding for social 
programs. Our experience has been that New York SSI recipients 
cannot survive on their monthly benef its--which equal 90% of the 
poverty level for individuals—and that a substantial increase is 
needed. 

B. State Supplement. Mandate states to provide a supplement 
to bring recipients up to at least 125% of the poverty line until 
the federal benefit levels are raised to 125% of the poverty line. 

II. RESOURCES 

A. Increase resource limits to $7,000 for individuals and 
(10,500 for couples and simplify the resources test by streamlining 



171 



the exclusions. This recommendation will encourage recipients to 
save some funds for necessities or emergencies which cannot be net 
from their monthly benefits. Eliminating specific exclusions (i.e. 
burial funds) while increasing the resource limits would simplify 
the SSI program and provide greater flexibility to recipients for 
conservation and use of their funds. This change would 
particularly help homeowners on SSI who accumulate funds to pay 
their property taxes and then find that they have exceeded the 
resource limit resulting in their ineligibility and being charged 
with an SSI overpayment. 

B. Change the period foi; time-limited exclusions to 12 
months. This proposal will provide additional time for SSI 
recipients to spend funds (i.e. retroactive SSI and Social Security 
payments). Some older recipients who, by necessity, are accustoned 
to purchasing only basic necessities have difficulty spending down 
even moderate sums of money. 

C. Change the method for calculating overpayments that result 
from excess resources. The method for calculating overpayments 
resulting from excess resources should be changed to limit the 
amount of the overpayment to the person's excess resources. "he 
present rule, whereby individuals whose resources exceed the 
allowable limits by even one dollar can be charged with an 
overpayment for several thousand dollars, is excessively punit .ve 
and causes many problems for SSI recipients. 

III. INCOME 

A. Eliminate the consideration of in-kind support and 
maintenance as income. For too long, SSI recipients have been 
unfairly penalized for receiving in-kind assistance from fanr ly 
members and friends. Present rules allow in-kind assistance from 
non-profit organizations to be excluded from income calculations; 
now we must allow families and friends to provide simi'ar 
assistance . 

B. Exclude all interest and dividends from income. All 

interest and dividends should be excluded from income calculations; 
otherwise, individuals who have resources up to the increased 
levels recommended above will continue to be charged w^th 
overpayments (due to unreported income) when their cases are 
recertified. Allowing recipients a certain amount of resources and 
then counting the interest or dividends earned on these resources 
as income results in much anger and confusion among the recipients 
affected and causes excessive administrative costs for the Soc al 
Security Administration ( SSA ) . 

IV. DISABILITY 

A. In both the SSI and Social Security Disability programs: 
(a) eliminate the reconsideration level of appeal; and (b) provide 



172 



claimants the opportunity for a face-to-face interview with the 
decisionmaker prior to issuing a denial based on a disability 
issue. In addition, we urge that the decisionmaker be bound by 
Social Security regulations (as administrative law judges are) and 
not by the Program Operations Manual System. 

B. Establish a 90-day time limit to make initial 
determinations for new SSI claims on the basis of disability and 
begin paying benefits which would not be considered overpayments 
even if the individual is later found ineligible to receive SSI if 
the 90 day limit is exceeded. Close monitoring and scrutiny of 
claim denials are also necessary to prevent SSA's issuance of 
denials in order to meet the 90-day time limit. 

V. AGE REQUIREMENT 

A. Lower the age requirement to age 62, phased in over 3 
years. This recommendation is a first step in providing benefits 
to individuals who have health problems which prevent them from 
working but are unable to meet strict disability criteria, 
recognizing that other benefits are available under the Social 
Security program for individuals between the ages of 60 to 65. 

VI. SSA'S SERVICES 

A. Increase SSA's administrative budget to provide for at 
least 6,000 additional positions as a first step toward adequate 
staffing. This modest increase in SSA's administrative budget is 
desperately needed to help an understaffed SSA meet the increased 
and growing workload. 

B. Establish specific funding for outreach by increasing the 
SSI administrative budget by at least 5%. Outreach funds should be 
made available to non-profit organizations on an annual basis to 
support ongoing activity to reach a population which is difficult 
to identify and to enroll. 

C. Mandate that SSA offices complete short-form food stamp 
applications for all interested SSI claimants. Any short-form 
should elicit enough information to make determinations on 
eligibility for food stamps without applicants' having to go to the 
food stamps office. 

VII. ACCOUNTING ISSUES 

A. Change from retrospective monthly accounting to 
prospective monthly accounting. Benefits should be computed based 
on a prospective monthly accounting basis. Too often, individuals 
who are no longer in receipt of income (cash or in-kind) have such 
assistance counted for an additional two months. Congress 
recognized the hardships resulting from retrospective monthly 
accounting and excluded certain types of income from this rule. 

Now is the time to abolish this accounting rule entirely. 

We hope these comments are helpful. We will continue to make 
ourselves available to work with the Subcommittee on Human 
Resources to improve the SSI program so that needy aged, disabled 
and visually impaired persons receive sufficient assistance from 
this vital program. 



173 

David R. Brvant 

ATTORNEY AT \M* 

SUITE 1625 

ISO NORTH LASALLE STREET 

CHICAGO. ILLINOIS 60601-2671 



Honorable Harold E. Ford, Chairman 
Subcommittee on Human Resources 
U.S. House of Representatives 
1102 Longworth HOB 
Washington DC 20515 



Dear Congressman: 



July 14, 1993 



Re: SSI Hearings 
Attn: Harriett Lawler 



1. The SSI Modernization Panel recommendations, although 
well intentioned, would break the bank without any promise of 
success for the stated goals. 

2. Zeblev has created a standard (unable to do "age 
appropriate activities") that is maleable and uneven in 
application. The "educators and others" should suggest an 
alternative standard since the present one has proven unworkable 
for SSA. 

3. In Chicago, the problem with substance abusers 
obtaining SSI benefits and not meeting treatment requirements is 
acute. Essentially, federal funds are financing drugs on the 
street. Since I handle about 20 to 30 of these types of cases 
(alcohol and drug - 512.09) each yeair over tbe l a st 20 yoars, I 
have seen a decline in the will and ability of SSA to follow the 
law mandating program participation. What exists is on paper only. 
"Good" drug rehab programs have extensive waiting lists and 
priorities, (ie alternative sentencing). 

What exists, isn't working - except to the benefit of 
some addicts in terms of funding a bad habit. Either admit defeat 
or fund rehab programs. 

4. In very limited circumstances, SSI Trusts are 
appropriate. However, this area has ripened with abuses and 
unnavigable pits for well meaning relatives. Ask Sen. Braun from 
Illinois. Is SSI meant for "poor" people who are disabled? 



Since you have not scheduled a Hearing date yet, I wish 
my general written comments to be made a part of the printed 
record. I will be in Europe for much of August to review the 
merger of the East and West German Social Security systems. 
Hopefully, I will be able to expand in some detail on the four 
areas you intend to cover. 

Very truly yours. 




David R. Bryant 



DRB:maa 

cc: Janice Hays 

cc: Nancy Katz 



174 



CALIFORNIA STATE DEPARTMENT OF SOCIAL SERVICES 

TESTIMONY FOR OVERSIGHT HEARING ON 

SUPPLEMENTAL SECURITY INCOME 

My name is Eloise Anderson and I am the Director of the 
California State Department of Social Services (CDSS). The CDSS 
wishes to express its appreciation to the Panel of Experts for 
their extensive review of the Supplemental Security Income (SSI) 
Program. We agree with their findings regarding several issues, 
in particular, the need for simplification of the State 
Supplementary Payment (SSP) Program. Additionally, we have 
comments regarding the SSl/sSP rules for drug and alcohol 
addicted recipient populations and the issue of fraud in the 
SSI/SSP Refugee/ Immigrant population. Finally, we wish to call 
attention to an oversight by the panel regarding the issue of 
federal pass along rules. The following provides California's 
comments regarding the Modernization Project and other SSI/SSP 
related issues. 

SIMPLIFICATION OF THE SSP PROGRAM 

The Panel's review of the SSI Program revealed that, in an 
attempt to protect recipients who were receiving benefits 
pursuant to States' pre 1974 programs for the needy, SSP laws 
were enacted to require States to maintain those programs ' 
payment and living arrangement categories. States cannot 
eliminate a payment category without risking the loss of Title 
XIX Medicaid funds. 

While a category could be absorbed into another existing 
category, the persons in the absorbed category must be paid at 
their prior rate if it is higher. This means that a State would 
actually add a category to designate the former members of the 
absorbed category for payment purposes. This does not result in 
fewer payment categories and in fact adds to the administrative 
complexity and costs of the program. 

In order to restrict States from reducing their costs by reducing 
their SSP payment levels when SSI benefits are adjusted for the 
cost of living, the SSI statute was amended in 1976 to require 
States to maintain their SSP benefit levels at the levels in 
effect in 1976. In 1983, another amendment was enacted which 
required that SSP payment levels be maintained at the levels in 
effect in July, 1983. These amendments, coupled with the payment 
and living arrangement category restrictions prevent States from 
simplifying their SSP programs. 

In consideration of the Omnibus Budget Reconciliation Act (OBRA) 
of 1993 's requirement that States pay for the administration of 
the SSP based upon the complexity of the States' SSP Programs, 
California proposes that federal statutes be amended. 
Specifically, we propose that amendments be enacted to allow 
States to reduce the number of payment and living arrangement 
categories without penalty. Additionally, amendments to the 
federal pass along requirements should be enacted. This issue 
will be discussed in detail in the following comments regarding 
the report's section on the federal pass along rule. 

FEDERAL PASS ALONG STATUTE 

The Report of the Experts on the SSI Modernization Project did 
not accurately explain either the federal pass along statute or 
its effect upon the States. Specifically, the report states that 
in 1976, the SSI statute was amended to require states to pass 
along any SSI increases. Actually, that law required that States 



175 



maintain their SSP payment levels at the levels in effect in 
1976. The report failed to note that this requirement was 
amended again in 1983 to require States to maintain their SSP 
payment levels at the levels in effect in March, 1963. 

While the report accurately reflects the intent of the 1976 
amendment , i.e., to prevent States from reducing their SSP 
payments when federal increases are granted, it does not speak to 
those States which granted SSP cost-of-living increases (COLAS) 
between 1974 and 1983. Between 1974 and 1983 and especially 
between 1976 and 1983, California granted generous COLAS for SSP 
recipients . These increases were granted in good faith and in 
acknowledgement of the intent of the SSI/SSP Program, which was 
to lift the aged, blind, and disabled above the poverty level in 
order to give them the chance to become self-supporting. For 
States which did not increase their levels, the imposition of the 
pass along requirement and the current mandate regarding the 
States ' responsibility for administrative fees do not have the 
severe fiscal effect that is being experienced by California. 

Because California granted substantial COLAS between the years 
1976 and 1983, our SSP payment levels are among the highest in 
the nation. Due to a severe state fiscal crisis, we have reduced 
some of our levels during the past two years. Despite these 
reductions, our SSP payment levels are among the highest in the 
nation. The federal statutes regarding the retention of payment 
and living categories and the pass along requirements have always 
been detrimental to California as they have kept our program 
unnecessarily complicated and, in fact have rewarded those States 
which chose not to grant COLAS. As a result of the passage of 
the OBRA of 1993, these restrictive federal mandates have become 
even more detrimental to California. He are required to pay 
administrative costs based upon the complexity of our program, 
yet are not allowed to simplify this, program. California urges 
the Committee to support amendment of- the federal pass along 
statutes to require that the minimum SSP payment level be the 
average 1983 national SSP payment level. 

These restrictive federal mandates were not part of the original 
SSI/SSP contract between the States and the Social Security 
Administration (SSA). In fact, the absorption of SSP-related 
administration costs by the SSA in return for the SSA's authority 
to subtract a recipient's countable income from the SSI portion 
of the benefit first were key factors in California's decision to 
enter into this contract. Although the contract provides that no 
changes can be made to its provisions without the mutual consent 
of both the States and the SSA, the reality is that the 
amendments noted above were enacted without the States ' consents . 

The mandatory payment of administrative costs by the States is 
especially unfair in light of the history of this program. Under 
the pre-1974 state programs for the aged, blind, and disabled, 
the Federal Government offered grants-in-aid on a matching basis 
for administrative costs. In addition, a recipient's countable 
income was shared equally between the Federal and non-Federal 
governments. Federal financing of these programs was provided 
through an open-ended appropriation from general revenues.. 

Finally, the restrictive mandates currently in effect for 
SSI/SSP, coupled with the repeal of some of the program's 
original protections for states, i.e. repeal of federal fiscal 
liability, have resulted in the loss of control of States' 
expenditures. California urges the Committee to support the 
reinstatement of countable income and administrative cost sharing 
for the SSP Program between the States and the Federal 
Government . 



176 



DRUG ADDICT/ALCOHOLIC SSI/SSP RECIPIENTS 

In order to receive SSI/SSP benefits, Federal law/regulation 
requires SSI/SSP recipients who are drug or alcohol addicts 
(DA/A) to have a representative payee and to attend appropriate 
treatment, if available. In addition, when an applicant's 
eligibility determination requires several months of review, 
approved applicants are eligible to receive large retroactive 
benefit payments. 

REPRESENTATIVE PAYEE 

SSA has great difficulty locating responsible persons or 
organizations to act as representative payee for DA/A recipients. 
Consequently, representative payees can be a recipient's 
alcoholic friend or drug dealer. This has led to unfavorable 
public opinion and media coverage regarding SSI/SSP monies being 
paid to drug dealers and other questionable persons. 

California urges the Committee to amend the representative payee 
requirements to open the program to more private, religious, or 
public entities ( such as county welfare or social services 
departments) to act as representative payees for recipients. The 
recent provision for a small payment for services rendered should 
encourage responsible agencies to act as representative payees 
which will ultimately benefit both the recipients and the 
taxpayers. 

TREATMENT 

In California, SSA contracts with an outside Referral and 
Monitoring Agency (RMA) to oversee DA/A recipients' treatment 
plans and to monitor recipients' attendance. It is also required 
to report non-compliance on a timely basis to SSA. 

The actual provision of treatment can be academic, as it is easy 
for recipients to avoid treatment. According to Federal 
regulations, treatment must be both available and appropriate. 
Any treatment facility whose access requires the use of public 
transportation may be deemed "unavailable" because the recipient 
has to pay for transportation. If the appropriate treatment is 
determined to be in-patient treatment and there is no bed 
available without fee, the treatment is considered to be 
"unavailable". If the facility requests a nominal fee or co-pay, 
for any type of treatment, it may be deemed "inappropriate" 
because recipients cannot be required to pay for treatment. In 
such cases, the recipient states that it is "too difficult" to 
attend a treatment program and SSA will waive that provision 
without suspension of benefits. As a result, it is probable that 
these recipients are using public funds to continue their abusive 
habits while successfully avoiding all treatment, with no 
detrimental consequences. 

California urges the Committee to consider holding retroactive 
benefits for recipients in a special treatment account which 
would be used to defray the costs of both transportation to and 
from the treatment sessions and any nominal costs or co-pays, if 
any, of such treatments. Any funds not used for this purpose 
would be held until such time as the recipient is no longer 
disabled primarily due to drug addiction or alcohol abuse and can 
be considered "recovered" sufficiently to manage his/her own 
affairs. At that time, any remaining retroactive benefits could 
be distributed, first to the counties for recovery of any general 



177 



assistance through the Interim Assistance Reimbursement Program, 
and then to the recipient to assist with ongoing living expenses. 
Such accounts would be set up, monitored and administered by the 
RMA as part of the monitoring function. 

We also recommend that before SSI/SSP payments can begin for DA/A 
recipients, they would be required to be registered into and 
regularly attending an approved treatment program. The RMA would 
have a greater responsibility for screening applicants, enrolling 
them in an appropriate treatment program, and monitoring them to 
assure their required attendance. The RMA would also be 
responsible for immediate action should it determine that the 
recipient is not meeting his/her required treatment program. 

California also urges that monitoring requirements be tightened 
and strengthened to ensure compliance. Current monitoring 
requirements include consequences for non-compliance which can be 
avoided by a recipient's claiming of hardship. The RMA may or 
may not report such non-compliance on a timely basis and SSA may 
or may not react on a timely basis. While recent budget cuts and 
resulting work backlogs have affected this aspect of the SSI/SSP 
program, we have received allegations that the RMA seldom 
responds to non-compliance reports. Although suspension from the 
program for non-compliance is currently required, this is not 
always done. California urges the Committee to require the RMA 
to submit a monthly report on each DA/A recipient, indicating 
their compliance or non-compliance for that month, rather than a 
cumulative statistical report. 

In the event of continued non-compliance, current regulations 
require a recipient's permanent suspension from the program. As 
this is not always done on a timely basis, California requests 
closer supervision by SSA to insure compliance with existing 
regulations . 

A reasonable time limit should be imposed for a DA&A recipient's 
successful completion of treatment. This can be determined by 
the case worker or professional assigned to the individual ' s 
treatment program and would allow recipients to progress at their 
own pace. The payment of benefits would be contingent upon a 
recipient's continued progress, up to a maximum of 24 months. 

REFUGEE /IMMIGRANT FRAUD 

California's SSP Program will distribute $2.1 billion in state 
funds this year through SSA. At this point, we do not believe 
the federal agencies responsible for fraud prevention, detection, 
and prosecution are taking effective action. 

The Social Security Administration (SSA) has acknowledged that 
numerous allegations exist regarding SSI/SSP fraud in the 
refugee/immigrant communities. In a news article entitled "The 
Big Refugee Rip-Off printed in The Orange County Register 's, 
Sunday, May 16, 1993 edition, Louis D. Enoff, Acting Commissioner 
of the Social Security Administration is quoted as saying SSA 
"first heard reports of refugees being coached to collect 
benefits illegally from a manager in Social Security's 
San Francisco region in 1988." He stated that he turned over the 
allegations to the U.S. Office of the Inspector General. Enoff 
was also quoted as saying "his agency is swamped handling new 
claims and that there is little time and not enough staff to 
review people already collecting benefits." 

The article further reported that "middlemen" who are experts on 
the ins and outs of government programs allegedly contact 
refugees/immigrants and teach them to pretend they are mentally 



178 



disabled in order to qualify for SSI/SSP. One excerpt depicted a 
Cambodian couple who went to a middleman looking for financial 
security and were told by the middleman, "I need to teach you how 
to lie." For $200 and a promise of half their first disability 
check, the middleman delivered his first lesson. Because of the 
SSA's lack of adequate bilingual staff, the middlemen are 
accepted by SSA offices to serve as translators during the 
medical examinations and other application-related appointments. 
Physicians and clinics were also alleged to assist in fraud by 
falsifying medical records and diagnoses." As a result of the 
news article and other reports of fraud received by the state, 
the State of California's Department of Justice (DOJ) recently 
conducted undercover investigations which resulted in the arrests 
of several middlemen suspected of assisting individuals in 
fraudulently obtaining entitlement to SSI disability and Medicaid 
benefits. 

It should be emphasized that fraud in the SSI/SSP Program cannot 
be attributed solely to immigrants. In fact, California has 
identified multiple areas of fraud that are not specific to any 
particular population group. The State is extremely concerned 
that this issue has been virtually ignored by the Federal 
Government despite contractual mandates. For example, Article 
II, Section I. of the SSI/SSP Contract between the SSA and the 
State of California requires the Secretary, i.e. the Federal 
Government, to "detect and investigate potential fraud or program 
abuse cases and make prompt reports to the State on such cases." 
This contractual responsibility for SSI/SSP fraud audits and 
investigation rests with the U.S. Department of Health and Human 
Services (DHHS), Office of Inspector General (OIG). However, OIG 
has only 28 special agents in its Region IX field offices to 
cover California and four other western states. In addition, 
these investigators are responsible for not only the SSI/SSP 
Program, but all of DHHS' programs including Title XIX Medicaid, 
Title IV-E Foster Care, Title II Social Security Retirement and 
Disability benefits, etc. To date, there has not been a Federal 
OIG agent assigned solely to the SSI/SSP Program. The current 
Commissioner of SSA's Region IX has stated that although Federal 
instructions require that SSA fraud cases be investigated by the 
OIG, "we have had little success in persuading OIG to pursue 
investigation of these cases." Even if OIG were to investigate 
SSI/SSP fraud cases, the U.S. Attorney's Office's policy is to 
not accept cases with losses less than $20,000. And while this 
fact alone is disturbing, the reality is that cases with losses 
less than $100,000 are not accepted for prosecution. 

It is worthwhile to note that the Food Stamp Program, a 100 
percent federally funded program, and the Aid to Families with 
Dependent Children (AFDC) Program, a federal/state funded program 
with roughly the same State General Fund expenditures ($2.1 
billion) as SSP, have a highly visible $60 million fraud 
prevention program in place, involving over 700 welfare fraud 
investigators in 58 county welfare departments or in district 
attorney offices under a contract with the county welfare 
department. This program is currently funded with 75 percent 
Federal funds for the fraud investigators' costs. The remaining 
non-federal costs are paid, depending on the cost types, with 
either 100 percent State funds or shared between the counties and 
the State. 

In light of the fact that SSI/SSP fraud investigation is the 
responsibility of the federal government and is not being carried 
out, California is currently examining several avenues for 
addressing this issue. Any proposals developed by the State will 
be presented to SSA for discussion regarding possible support and 
assistance. 



179 



California urges the Committee to support the proposals detailed 
in this statement of testimony. In summary, we are proposing to: 

* Reinstate the equal sharing of countable income between the 
States and the Federal Government for purposes of SSI/SSP 
grant amounts. 

* Reinstate federal matching funds for costs associated with 
the administration of the SSP Program. 

* Allow States to simplify and increase their SSP Program 
integrity by the repeal of restrictions regarding the 
reduction of payment and living categories. 

* Amend the required SSP payment minimum to the average 1983 
national SSP payment level. 

* Use drug or alcohol addicted recipients ' retroactive 
SSI/SSP benefits for their mandatory treatment-related 
costs. 

* Require drug or alcohol addicted SSI/SSP applicants' 
attendance in approved treatment programs prior to approval 
of benefits. 

* Impose a reasonable time limit for a drug or alcohol 
addicted SSI/SSP recipient's successful completion of 
treatment . 

* Enforce and strengthen existing monitoring and other 
regulations pertinent to drug or alcohol addicted SSI/SSP 
recipients. 

* Allow more public, private, and religious entities to act 
as representative payees for drug or alcohol addicted 
SSI/SSP recipients. 

The CDSS is very concerned regarding the current federal laws and 
regulations which govern the SSI/SSP Program. Amendments to 
federal statutes have resulted in the state's loss of control 
over costs related to the SSP Program. It is imperative that we 
regain this control and that the Committee recognize that the 
good faith under which States agreed to participate in the SSP 
Program has been disregarded. We ask that the Committee support 
the proposals outlined above and wish to express our appreciation 
for the opportunity to be heard on these matters. 



180 



Testimony on 

Modernization of the Supplemental 

Security Inoome Program 

Submitted to 

Subcommittee on Human Resources 

Committee on Ways and Means 

U.S. House of Representatives 

By 

Daniel Alvarez, Sr. , Commissioner 

Department of Human Services 

City of Chicago 

(312) 744-3111 
October 28, 1993 



Mr. Chairman, I greatly appreciate the opportunity to submit 
testimony regarding Supplemental Security Income and the homeless 
population of Chicago. 

My name is Daniel Alvarez, Sr. I am the Commissioner of the 
Department of Human Services of the City of Chicago. My department 
plays a primary role in securing shelter and services for homeless 
people in Chicago. This winter, we will be helping to fund 
approximately 4600 beds throughout the city. 

For the many people who are forced by circumstances to use our 
programs for the homeless, and for many of our other clients, too, 
Supplemental Security Income could be the program that transforms 
their lives. In fact, I think it is fair to say that, as 
originally conceived, SSI would have guaranteed that all aged, 
blind, or otherwise disabled persons would receive incomes no lower 
than the official poverty level. Unfortunately, because that 
original promise remains to be fulfilled, thousands of SSI-eligible 
Chicagoans struggle to survive either with no support from SSI, or 
with cash benefits that fall significantly below the poverty line. 
Many of them are clients of ay department. 

In my experience, SSI suffers from three major defects, each of 
which, I am gratified to note, has been highlighted in the SSI 
Modernization Project. 

The most serious deficiency of SSI is that so many people who are 
probably eligible to receive benefits are not enrolled. In Chicago 
it may be that half of those eligible remain outside the program, 
perhaps 120,000 people who, with adequate outreach, could be 
receiving benefits. And to look at it from a different, but 
equally shocking angle, perhaps half the homeless population of 
Chicago is eligible but unenrolled. 

The second serious shortcoming of SSI is the unconscionably long 
waiting time that must be endured by those who do apply for SSI, 
approximately half a year. To force destitute, disabled persons to 
endure six months with virtually no support, as is the case in 
Illinois, is to invite the most awful consequences. The backlog of 
unprocessed applications has become scandalous. 

Thirdly, even for those fortunate enough to apply for and receive 
SSI benefits, the maximum cash payment is so low that recipients 
remain mired in poverty, dependent on ad hoc or episodic 
supplementary support from other sources. 

Taken together these three deficiencies visit significant hardship 
on large numbers of people. They also, however, help to undermine 
entire communities. 



181 



Over the past two decades a number of Chicago's low- income 
communities have experienced a concentration and intensification of 
poverty that has left thea ill-equipped to assist their most needy 
■sobers. Among the causes of this devastating transformation are 
the loss of inner city jobs, private and public disinvestment in 
low-income communities, and in Illinois, the State's elimination of 
General Assistance and aoquiscence in the erosion of the real 
(inflation-adjusted) value of AFDC cash benefits. With the loss of 
income has come a weakening of the churches, community 
organizations and informal networks of friends and relatives that 
can constitute an informal social security system in low-income 
communities. 

In Chicago's dasply impoverished communities improvement in SSI 
could take on special importance. For individual households, the 
absence of alternative or supplementary sources of income would 
make an adequate SSI oash benefit a veritable lifeline. For the 
community, the cumulative effect of a significantly increased 
stream of SSI income would help to underwrite the revitalization of 
pressntly enfeebled community institutions. 

To these ends, I make the following recommendations. 

la. He need muah more outreach to the homeless population; it must 
be continuous, to reach the newly and periodically homeless, 
it must include the willingness and capacity to "walk the 
client through the process," because many homeless persons 
require that, and it must reach beyond the shelters in order 
to serve the people who will not use them. 

b. We need many more personnel to process the claims of the 
people who do apply; the backlog that now forces applicants to 
wait approximately half a year imposes a nearly unbearable 
burden on them, driving them deeper into poverty and 
compounding their problems. 

2. We need SSI payments that are large enough to lift and keep 
recipients out of poverty; if SSI means anything, it means 
that the United States has promised its aged, blind, and 
disabled citizens that they can count on adequate income. 

Mr. Chairman, implementing these three policies would make a major 
contribution to alleviating homelessness in Chicago. It would 
extend adequate benefits to about 120,000 additional already 
eligible people, and increase the level of cash assistance by 
perhaps 50% for the approximately 120,000 clients already enrolled. 
Nearly a quarter of a million households would thus benefit 
immediately and directly, and the fabric of community institutions 
would gain strength in response to the indirect effects of the 
added income. 

It is no accident that as our social safety net has grown weaker, 
our problems of poverty and homelessness have grown worse. 
Correspondingly, we are not powerless to ameliorate these 
conditions. SSI exists for just such purposes. It is up to us, 
all of us, to make sure that SSI fulfills its promise and serves 
those purposes. , 

Thank you. 



182 



TESTIMONY OF LINDA R. WOLF JONES 
COMMUNITY SERVICE SOCIETY OF NEW YORK 

Thank you for this opportunity to submit testimony for the 
printed record on the subject of the Supplemental Security Income 
program (SSI) . 

The Community Service Society of New York is an organization 
that has been working actively to improve the conditions of the 
poor for almost 150 years. One of the ways in which we carry out 
that mission is through analysis and advocacy of social policies in 
such fields as housing, education and income security. It is our 
concern for the economic well-being of the nation's poor in 
general, and the urban poor in particular, that underlies this 
statement to the Subcommittee. 

Mr. Chairman, welcome back. Almost exactly ten years ago - 
July 18, 1983 - I testified before you on welfare and urban poverty 
when the panel was the Subcommittee on Public Assistance and 
Unemployment Compensation. It is dismaying to have to note that 
none of the problems have gone away in the intervening ten years. 
If anything, the problems associated with poverty have gotten worse 
and most of the programs to deal with them are even more inadeguate 
now than they were back then. 

The Supplemental Security Income program was designed and 
implemented in the early 1970s to replace a haphazard system of 
state programs for the aged, blind and disabled poor. Currently, 
more than five million people receive monthly federal payments from 
the SSI program. Roughly 40 percent of them also receive a 
federally-administered supplemental state payment each month. When 
the three payment categories of federal only, federal plus 
federally-administered state supplement, and federally-administered 
state supplement only are taken into consideration, the SSI program 
is responsible for mailing monthly checks to more than five and a 
half million people, all of whom would be desperately poor without 
the benefits that they receive. 

Financially, poor people who have applied and been found 
eligible for the SSI program have fared better than other 
categorical groups of the poor, such as female-headed families and 
non-aged, non-disabled adults. That is not to say that SSI 
beneficiaries have fared well, certainly not by middle class 
standards. However, as public assistance programs go, the SSI 
program is not a bad one. All else being egual (that is, in the 
absence of major, eligibility-level changes in their disability or 
other life circumstances) , recipients have, for the most part, been 
able to count on continuing eligibility, regular receipt of 
benefits, regular cost-of-living increases, and a minimum of 
bureaucratic hassle when compared to such programs as Aid to 
Families with Dependent Children (AFDC) . Nevertheless, as the 
experts on the SSI Modernization Project determined after extensive 
review and deliberations, there are many ways in which the program 
could be strengthened to serve more needy people and to serve both 
applicants and beneficiaries much better than it does at present. 



183 



In the press release announcing these hearings, you asked for 
testimony relating to the recommendations made by the SSI 
Modernization Panel in its August 1992 report. We reviewed that 
report and commended the panel of experts in writing for producing 
a comprehensive and sensitive evaluation of the SSI program. The 
report offers a thoughtful range of strategies to provide more 
timely and sufficient benefits to the population the program was 
designed to serve. However, we also believe, as we indicated in 
our letter to the Modernization Project's staff director last 
November, that in its thoroughness and sensitivity in advocating 
for the needs of the SSI population, the panel has produced 
recommendations that, taken in their entirety, may be too far- 
reaching for the American economy of the 1990s. 

Overall, CSS supports the report's unifying themes and 
priorities, and the specific recommendations it presents to address 
the goals of equity, efficiency, outreach, and coordination with 
other social welfare programs. Certainly, we have no theoretical 
argument with the importance of the four priority needs identified 
in the report: increased staffing, higher benefit levels, 
elimination of benefit reductions based on in-kind support and 
maintenance, and improved resource limits and exclusions. A 
majority of the experts on the panel concluded that these four 
changes were all so important and deserving of attention that they 
could not even prioritize them. 

Increased staffing would alleviate the obstacles now 
encountered by applicants with disability claims as well as by 
other applicants and recipients who need to be in contact with the 
bureaucracy. The General Accounting Office testified in March of 
this year before the Subcommittee on Social Security that there are 
"inordinate delays in processing disability claims". (The 
disability determination process is the same for both Social 
Security and SSI and is carried out by the same staff.) Although 
the Social Security Administration has made some efforts in the 
direction of reducing the processing delays, the claims backlog 
continues to be considerable and new claims continue to pile up on 
top of existing ones for months at a time. Inadequate staff 
resources also impacts on the ability of applicants to receive the 
kind of one-on-one help that they may need in order to file a 
claim, particularly if their disabilities are mental or 
psychological rather than physical. Finally, the need to shift 
resources into initial claims determinations has also impacted on 
the Social Security Administration's ability to carry out other 
functions, such as continuing disability reviews. 

The advantages of higher benefit levels are obvious and need 
no elaboration here. In February 1993, the average federally- 
administered SSI payment was $368 per month, or $4,416 per year. 
(Aged recipients tend to receive less than the average; disabled 
recipients tend to receive more.) The maximum federal SSI benefit 
for an individual living alone was $434 per month, or $5,208 per 



184 



year. By comparison, the U.S. Department of Census poverty 
threshold for an individual at the beginning of 1993 (preliminary 
1992 figures) was $7,141. An individual who was receiving the 
maximum federal benefit and had no other income would be living at 
an income level equivalent to 72.9 percent of the official poverty 
standard. 

Similarly, the elimination of benefit reductions based on in- 
kind support and maintenance would be of vast help in assuring more 
adequate income for the aged, blind and disabled poor. Currently, 
any SSI recipient who receives in-kind support and maintenance 
suffers a one-third benefit reduction; the maximum federal payment 
at that point declines to $289.34 per month. Eliminating the 
provision altogether would provide sorely needed income while 
getting rid of a difficult to administer, complex, demeaning and 
frequently inequitable program requirement. 

Finally the priority recommendation for improved resource 
limits and exclusions reflects the inadequacy of the current limits 
and the inadequacy and complexity of the current exclusions. At 
the present time, countable resources are limited to $2,000 for an 
individual and $3,000 for a couple. Surely it can be argued that 
someone who has $100 over the limit and no income is needy at a 
level commensurate with the original purposes of the SSI program. 

Without listing all of the additional recommendations of the 
Modernization Panel, suffice it to say that, for the most part, 
they are equally sensible, equally well-argued and equally worthy 
of serious attention and consideration. The panel's experts have 
done a truly admirable job of uncovering the deficiencies of the 
SSI program, analyzing the needs of recipients vis-a-vis the 
program, and laying out the changes that would make the program 
more responsive to those needs. Their basic argument is 
compelling. In addition, public reaction to it is probably further 
enhanced by the fact that not only are SSI recipients 
unquestionably poor, but they have an exacerbating condition in the 
form of old age, blindness or disability. 

In the best of all possible worlds, CSS would strongly support 
the introduction of the majority of suggested improvements as 
quickly as possible, including all four of the top priorities which 
I have already mentioned (increased staffing, higher benefit 
levels, elimination of benefit reductions based on in-kind support 
and maintenance, and improved resource limits and exclusions) . 
Implementation of the package of suggested program changes would 
greatly improve the lives of the more than five and a half million 
poor people already on SSI, the hundreds of thousands of applicants 
whose cases are backlogged, and the half million more who would 
become eligible if the changes were made. We recognize the income 
needs of the aged and disabled poor, appreciate the report's 
recommendations for dealing with those needs, and will do our part 
in advocating for legislative attention to them. 



185 



There is, however, another side to the issue that moderates 
our enthusiasm - not for the report, but for any advocacy that 
would press for the immediate and unfettered implementation of its 
recommendations. We recognize, however painfully, that today's 
prevailing fiscal constraints force an unfortunate competition 
among often equally necessary domestic programs. We understand 
that limited resources not only make the far-reaching program 
change that is called for in the recommendations unlikely at the 
present time, but - even were the funding available - it would 
probably come at the expense of cutbacks in other public assistance 
and social welfare programs, particularly those programs which are 
considered to serve less "worthy" populations. We are particularly 
concerned about this possibility in light of the discussions on how 
to "end welfare as we know it" that have already begun within the 
Clinton Administration. 

It is because of this harsh reality - a shrinking zero-sum 
game for social programs - that we feel compelled to support the 
view put forward in the report by panel members Bowler, Fulton, 
Hess, Nathan and Smeeding that changes be phased in, with immediate 
attention given to increasing staff, eliminating administrative 
complexities (including elimination of benefit reductions due to 
in-kind support and maintenance) , and instituting a plan for 
gradually increasing benefits and expanding eligibility. These 
changes would get us started in the right direction without being 
so costly as to force us to turn our attention away from other, 
equally needy groups in the population. 

Specifically, the concerns of the group which I will call 
Bowler, et al. bring in a note of practicality and political 
awareness that heightens, rather than diminishes, the value of the 
report and its recommendations. One could almost sum up their 
three concerns as cost, cost and cost. First, they point out that 
the cost of all of the recommended options would, by the end of 
five years, double the current federal expenditure on the program 
and would have a significant impact on state and local government 
expenditures as well. Second, in terms of top priorities, they 
indicate a preference for "short-term action lower-cost changes" 
over "an extremely expensive option on increasing benefits." 
Third, acknowledging the expense associated with the larger panel's 
recommendations, they argue that "proposals on the scope and 
phasing of SSI changes must fully take into account their 
cumulative effect and the fact that other pressing domestic 
problems also have priority claims on substantial additional 
resources." It is this third concern that I have also tried to 
underline in my own remarks, since it reflects in large part the 
CSS position based on our reading and assessment of the panel's 
recommendations . 

In summary, we greatly appreciate the work done by the 
panel of experts who gave their time and effort to the SSI 
Modernization Project; we commend their thoroughness and applaud 



186 



their recommendations. We look forward to a world in which none of 
us have to suffer the indignity of poverty and in which the 
appropriate combination of work and social programs provides an 
adeguate level of income and a decent living standard for all. In 
the interim, until resources for domestic social programs are 
expanded in pursuit of that goal, we believe that the funds 
available for these programs must be utilized eguitably to meet the 
sometimes competing needs of the aged and disabled, poor children 
and families, unemployed heads of households, and other 
disadvantaged members of society. 

Again, thank you for this opportunity to submit our comments 
on the SSI Modernization Project Final Report. We look forward to 
continuing to work with you and with the Subcommittee staff on SSI 
and other issues of mutual concern. 






187 



TESTIMONY OF FRANK J. MECCA 
COUNTY WELFARE DIRECTORS ASSOCIATION OF CALIFORNIA 



The County Welfare Directors Association of California (CWDA) is a non-profit 
association of the 58 county welfare/social services agencies in California. CWDA represents 
county welfare/social services agencies on a vanety of program, legislative, and fiscal issues 
before the California Legislature. California agencies and before the U.S. Congress and 
appropriate federal agencies. County welfare departments in California administer most of the 
public assistance and social service programs in the state, worth some $10 billion to all levels 
of government. Counties also pay a significant nonfederal share of cost of these programs, 
including AFDC, JOBS/GAIN, Food Stamps, Medicaid, Child Welfare Services, Foster Care, 
In-Home Support Services, Adult Protective Services and refugee assistance programs. 
California counties are also responsible for the provision of General Assistance and basic 
health care to indigent Califomian's who have no other means of support, independent of state 
or federal regulations or funding. 

CWDA's Interest in SSI Reform 

In the State of California, counties are statutorily required under the California Welfare 
and Institutions Code to "relieve and support" the basic subsistence and health care needs of 
all indigent Califomians who have no other means of support. Recipients of AFDC, Medicaid, 
and SSI are not eligible for General Assistance. In order to minimize undue hardship to 
indigents while their applications for aid are being processed, many entitlement programs such 
as AFDC, Food Stamps, Medicaid and General Assistance have processing time limits and 
provide for expedited benefits. However, there are no processing time limits for applications 
for SSI. Therefore, while otherwise indigent applicants for SSI are waiting long periods of time 
for approval, they are eligible for General Assistance. Therefore, county welfare departments 
in California in effect administer an "SSI interim assistance" program in the form of General 
Assistance. 

Processing Delays for SSI 

Processing time for SSI applications has steadily increased in California over the past 
several years from an average of three months to the current average of nine months. If the 
application is denied, the multiple level appeal process can take as long or longer. It is not 
uncommon for applicants to finally receive approval two or three years after the initial 
application. CWDA believes that the fundamental problem, as detailed in the Supplemental 
Security Income Modernization Project: Final Report of the Experts, is insufficient staff in the 
Social Security Administration District Offices to handle the growing volume of applications. 
According to the Modernization Report, over 17,000 positions were eliminated from the Social 
Security Administration's budget between 1964 and 1990. These positions have not been 
replaced. The elimination of positions has had the expected effect. Between 1987 and 1990, 
the Social Security Administration's ongoing backlog increased by more than 250 percent. The 
national backlog is estimated to reach 1.4 million cases by the end of 1993; California has 
more pending disability cases (around 182,000 and growing) than any other state. As 
processing delays increase, so increases the number of General Assistance recipients in 
California. 

It is our experience that staff cutbacks and growing backlogs are also compromising the 
depth and thoroughness of the reviews of initial applications for SSI, resulting in more denials, 
and causing a dramatic increase in the number of appeals. Overworked SSA officials find 
themselves in a catch-22: the more time spent reviewing, analyzing, and following-up on initial 
applications, the higher the backlog grows. We find that many applications which are initially 
denied and ultimately granted during the appeal process, would have been initially approved 
if SSA district office staff had the time to thoroughly review, evaluate and follow-up on initial 
applications. 

♦ CWDA therefore recommends that Congress and the President augment 
the number of trained staff in the Social Security Administration to ensure 
that the SSA has sufficient staff to provide thorough reviews of initial 
applications for SSI. 

If the application is denied, most frequently because the "disability is not severe 
enough," there are several stages of appeal. The appeal process begins with "reconsideration," 
which is a paper review of the applicant's documentation, and continues through a more formal 
appeal process which includes a hearing before an Administrative Law Judge, and an Appeal 
Council Review. The final appeal for an applicant would be before the Federal District Court. 



188 



Of the 2,258,980 initial determinations made on disability claims in the Fiscal Year 1992, 
43 percent were allowed and 57 percent were denied. Only 49 percent of initially denied 
applicants requested reconsideration and 17 percent of those who sought reconsideration were 
allowed while 83 percent were denied. 73 percent of those denied reconsideration appealed 
before Administrative Law Judges, who reversed 68 percent of the cases and granted benefits. 
Given that such a large percentage of reconsiderations are denied, then ultimately approved 
by an ALJ, the reconsideration process appears to be more of an "endurance test" than a 
useful stage in the appeal process. 

♦ CWDA therefore recommends that the unproductive and time-consuming 
reconsideration process should be eliminated. This is consistent with Vice 
President Gore's report on reinventing government, which has proposed the 
elimination of unnecessary paperwork and processes. 



A large number of indigent people have no resources or income on which to live while 
the SSI application process is pending. County General Assistance (GA) is often issued to 
provide for basic needs during this time period. If ultimately approved for SSI, a retroactive 
Medi-Cal card will be issued to cover allowable medical claims that were incurred during that 
period. The SSI program reimburses the County for these so-called "Interim Assistance" 
payments out of any retroactive benefits the applicant is granted, when and If the application 
is approved. 

However, counties currently bear the full administrative cost of the Interim Assistance 
Case while the SSI application is pending. These costs include the eligibility intake and 
ongoing processing for the Interim Assistance case, as well as the cost of SSI advocacy. 
Advocacy activities are necessary, particularly for the mentally and emotionally impaired, and 
includes everything from assistance with completing forms to gathering existing medical 
reports, and providing transportation for SSI appointments. As the length of time increases 
for SSI processing, these costs escalate accordingly. Financially strapped counties can ill 
afford to cover expenses due to the inability of SSI to process applications within reasonable 
time frames. As the time for processing cases lengthens, counties carry an enormous burden 
of costs and resources to meet the needs of this population. 

♦ CWDA therefore recommends that SSA reimburse counties and local 
governments for the administrative costs associated with Interim 
Assistance cases that get approved for SSI. 

Modernization of Definitions of Disability 

Current definitions of disability for purposes of SSI eligibility have not been "modernized" 
or changed to reflect technological or societal changes that have occurred in medicine and 
social trends for the past several decades. SSA needs to consider modifying the definitions 
and criteria used to establish disability to address current medical and societal dynamics, and 
advances in physical and mental health diagnostics. For example, Chronic Fatigue Syndrome 
is not a recognized diagnosis for SSI determination of disability, yet it is accepted as a disabling 
condition by the medical community. Some individuals meet most or all of the requirements 
under the SSI disability evaluation criteria yet are disapproved at alarming rates. If the 
definition of disability was modernized to include current diagnostic practice, some clients that 
are currently denied SSI would become eligible. CWDA believes that modernization of 
definitions of disability is absolutely critical if the SSI Program is to continue to meet its intent 
and purpose. 

♦ CWDA believes that the SSA undertake a process to modernize and update 
definitions of disability to reflect social, medical and diagnostic changes 
that have taken place over the past several decades. 

With the war on drugs a tragic failure, the federal and state governments have forsaken 
a vulnerable population, leaving counties with the responsibility to assist increasing caseloads 
with dwindling resources of charitable and nonprofit human services agencies. 

♦ We propose that the federal government refocus the "war on drugs" by 
shifting a portion of the resources that are currently spent on interdiction 
to support and expand treatment programs for the indigent substance 
abusing population. 



189 



These individuals should be held responsible for attending and receiving treatment, which 
would necessitate a periodic evaluation that could include an assessment of their ability to be 
self-sufficient. 



Sullivan v. Zebley 

On a national level, major progress has occurred with respect to meeting the needs of 
disabled children thanks to disability statutory changes in the SS Children's disability area and 
the Social Security Administration's implementation of the Sullivan v. Zeblev U.S. Supreme 
Court decision. This case modified standards of assessing eligibility for SSI children's benefits. 

Timing for Administration and Congressional review of the SSI program is critical in 
recognition of the needs of children in the Title IV-B Child Welfare Services and Title IV-E 
Foster Care system. County child welfare professionals in California estimate that 80 percent 
of their interventions involve families where substance abuse or usage is a significantly related 
factor. Counties report that endangerment due to parental neglect, incapacity or absence are 
the principal findings used by juvenile courts to place children in foster care when a parent with 
a drug problem cannot provide appropriate care and supervision. 

The SSI program represents a major resource for parents who come to the attention of 
the child welfare services system and whose children are placed in out-of-home care for their 
protection. The majority of foster children do return home to their biological parents, and 
disabled children do require ongoing specialized medical attention. SSI benefits and medical 
care can represent the financial stability and medical resources that enable parents to care for 
their children. The extensive medical and psychological evaluation and assessment necessary 
to determine SSI eligibility provides the "work-up" necessary to provide ongoing treatment. 

To improve the interaction between the Federal SSI and Title IV-E foster care programs, 
CWDA recommends some necessary changes in the children's disability area, including 
concurrent SSI/Title IV-E Payments and SSI Payments for eligible children residing in 
emergency shelter care. 

Concurrent Payments 

Existing HHS policy announcements prohibit concurrent payments from the Title IV-E 
Foster Care and Title XVI Supplemental Security (SSI). Receipt of payment is restricted to one 
or the other of these programs, as selected by the individual recipient. In instances where a 
child is eligible for both SSI and Title IV-E Foster Care, the state/county agency may utilize 
funds from only one of the programs. In many instances, the costs of care of the eligible child 
will exceed the SSI rate. 

♦ CWDA recommends a change in federal policies to allow states to utilize 
Title IV-E Foster Care to supplement an eligible child's Title XVI 
Supplemental Security Income up to the amount of the foster care rate. 
This would require the allowance of concurrent but not duplicate 
payments. 

Emergency Shelter Care 

Under the Title XVI Supplemental Security Income (SSI) program regulations, SSI 
payments may not be made to individuals residing in public institutions, with certain exceptions. 
These exceptions, detailed in Section 416.211, basically include medical facilities, board and 
care home serving 16 or fewer residents, educational or vocational facilities, and emergency 
shelters for the homeless. Children are admitted to emergency shelter care for their own 
protection because they have been victims of abuse and neglect. Many children are admitted 
to these shelters for assessment for casework and foster care placement planning. For most 
of them, the length of stay in the shelter is brief, as the children are then returned home, to 
relatives, or placed in an appropriate foster care setting. However, these public shelter facilities 
do not qualify for SSI payments. 

Under the Title XVI program regulations, individuals residing in semi-public institutions 
are eligible to receive SSI. These regulations, like the standards for disability for SSI eligible 
prior to the Zeblev decision, appear to have been intended to apply to adults. The existing 
standards regarding public institutions should not apply to both adults and children. 

Eleven counties in California operate emergency shelter care facilities. These counties 
represent over 70 percent of the statewide Child Welfare Services caseload. The remaining 
counties accommodate all children's needs through alternative out-of-home care settings, such 
as foster family homes or group care settings. This means that some counties are unable to 
equally access the same resources - SSI - for disabled children as are other counties. 



190 



Because the children who enter public emergency shelter care facilities are often most 
in need of the type of care and assessment provided by the facility, as opposed to foster family 
care, it is likely that a greater proportion of these children are eligible for SSI than the estimated 
proportion of children in foster care who are eligible for SSI. These children would also be in 
need of the benefits which accrue to children in foster care receiving SSI. 

♦ CWDA recommends that SSA modify existing Title XVI Supplemental 
Security regulations to include an exception for children who are 
temporarily placed in publicly operated emergency shelters. This 
exception can be linked to services provided under Title IV-B Child Welfare 
Services, Section 425 of the Social Security Act 

Conclusion 

CWDA appreciates the opportunity to testify on this important matter and offer our resources 
to the committee as it continues to explore SSI modernization. 



191 



DUNLAVEY WARD & PAGLIARI 

A PROFESSIONAL CORPORATION 
ATTORNEYS AND COUNSELORS AT LAW 

1129 State Street 

PQ Box 120 

Erie. Pennsylvania 16512-0120 

Mjchael E Dunlawy Esq* Telephone |8I4J 454-1129 

Robert C Ward. Esq Fax [814) 455-1151 

Raymond A Paglian. Esq. mm , ? „„ „ k^ „, 

July 21, 1993 



Ms . Janice Mayas 

Chief Counsel and Staff Director 

Committee on Ways and Means 

U.S. House of Representatives 

1102 Longworth House Office Building 

Washington, DC 20515 

RE: Press Release No. 7 dated 7/02/93 

of the Sub-committee on Human Resources 
Committee on Ways and Means 

Dear Counsel Mayas: 

I am responding to the above -captioned Press Release, 
particularly, in regard to Item No. 2, The effect of the Supreme 
Court's decision in Sullivan v. Zeblev and Item No. 4, Certain 
criteria for establishing trusts. 

The Zeblev decision was certainly a boon to disabled 
children. Prior to that decision, it was virtually impossible 
for disabled children to qualify for SSI benefits. I am certain 
that there are abuses within the system as with all programs. 
However, the experience in my practice, a major portion of which 
is Social Security, indicates to me that the Zeblev decision was 
extremely fair and allowed those children in need to receive 
benefits. 

Many of the Zeblev children are, not only disabled, they 
have catastrophic disabilities, which will require long-term and 
usually life-long care, well beyond the expected productive life 
for their parents, who are normally the main care givers. The 
creation of "Zebley trusts" in order to circumvent the $2,000.00 
asset restrictions has been an absolute necessity. There should 
be regulations, which will allow for the creation of trusts for 
the benefit of these catastrophically injured children in order 
to alleviate the psychological, financial and physical burden 
upon the parents. 



192 



The asset cap that currently exists precludes, in my 
opinion, the creation of an effective trust system, which will 
guarantee the care for these children throughout their adult 
life. The end result is that there is the prospect that these 
children will become a greater financial burden to society as 
their parents and family members either lose or can no longer 
provide the financial and physical care necessary for the child's 
maintenance . 

As I noted earlier, there will be certain abuses, but I 
believe that careful monitoring and sufficiently worded 
regulations will limit these abuses. The vast majority of 
Claimants are in dire need of assistance and this issue must be 
rectified. 

If you have any further question or any further comments, 
please contact me. 

Very truly yours, 

DUNLAVEY, WABB-& PAGLIARI 




MICHAEL E. DUNLAVEY, BSQUIRE 

MED/lrm 

cc : NOSSCR 

6 Prospect Street 
Midland Park, NJ 07432 



193 



GARY FLACK 



WRITTEN STATEMENT OF GARY FLACK 



I appreciate the opportunity to submit a written statement to 
the Subcommittee On Human Resources of the House Ways and Means 
Committee. In reviewing the July 2, 1993 Press Release No. 7, I 
noticed that the scope of the hearing does not specifically include 
how SSI benefits are calculated for veterans' families. Although 
this does not affect many people, I believe the Social Security 
Administration's method for doing this is unfair and should be 
corrected. Perhaps that was considered by the SSI Modernization 
Panel. In the event that it is not, I wanted to bring this little 
problem to your attention. I should state at the outset that in my 
law practice, I regularly represent Social Security claimants and 
help them obtain benefits to which they are entitled. One such 
client, Bessie Bouldware, has the problem that I describe in this 
written statement. 

Social Security Ruling 82-31 ( "SSR 82-31") is inconsistent not 
only with Social Security regulations, but also is inconsistent 
with 42 U.S.C. §1382a(a)(2)(B). Paxton v. Secretary of HHS r 856 
F.2d 1352 (9th Cir. 1988) framed the discussion thusly: 

In 1981, the Secretary changed the Social 
Security Administration's (SSA) policy 
regarding VA benefits paid for dependents. As 
of November 1981, the Secretary began to 
regard that portion of VA benefits paid to a 
veteran for the support of the veteran's 
dependent as countable unearned income to the 
dependent for the purpose of computing the 
dependent's SSI benefits. The Secretary 
issued this policy in the form of an 
interpretive ruling. Title XVI: SSI Treatment 

Of Veterans Administration Payments tQ S£l 

Eligibles/Fiduciaries , 82-31 S.S.R. 291 (Cum. 
Ed. 1982) [hereinafter SSR 82-31]. Under SSR 
82-31, the dependent's portion of VA benefits 
is now automatically used to reduce the 
dependent's SSI benefits. 

The Secretary adopted this new policy in 
response to court decisions, including our 
opinion in Whaley v. Schweiker r 663 F.2d 871 
(9th Cir. 1981). SSR 82-31. In Whaley , we 
held that the dependent's portion of VA 
pension benefits may not be counted as income 
to the veteran for the purpose of computing 
and reducing the veteran's SSI benefits. 663 
F.2d at 875. 



GARY FLACK 



194 



Shortly after Whaley was decided, the 
Secretary issued SSR 82-31, indicating that VA 
benefits paid to a veteran for the support of 
the veteran's dependent would be counted as 
income to the dependent for SSI purposes. 
Pursuant to SSR 82-31, Mr. Paxton's VA pension 
benefits were used to reduce Mrs. Paxton's SSI 
benefits. 



In SSR 82-31, the Secretary adopts a blanket 
policy of counting that portion of VA benefits 
paid to a veteran for the support of the 
veteran's dependent as unearned income to the 
dependent for the purpose of calculating and 
reducing the dependent's SSI benefits. This 
sweeping approach is inconsistent with the SSI 
regulations and the detailed approach they 
take to defining income. See. generally 20 
C.F.R. §§ 416.1100 to 416.1182 (1988) 
("Subpart K-Income"). 

First, SSR 82-31 creates an unsupported 
exception to the rule that "[a]nnunities, 
pensions, and other periodic payments" counted 
as unearned income usually relate to the 
claimant's prior work or service. 20 C.F.R. § 
416.1121(a). As we noted earlier, many types 
of payments are not considered unearned 
income. Section 416.1121(a) states that 
periodic payments counted as unearned income 
are "usually related to prior work or 
service. " 

VA benefits paid to a veteran for the support 
of the veteran's dependent are related to the 
veteran ' s prior service, but they are not 
related to the claimant's ( the dependent ' s ) 
prior service. Nonetheless, SSR 82-31 counts 
these periodic payments as unearned income to 
the claimant ( the dependent ) . The Secretary 
has given no explanation for this deviation 
from the general rule. 

Second, SSR 82-31 flatly contradicts the SSI 
regulation that describes "[w]hat is not 
income." 20 C.F.R. § 416.1103. Section 
416.1103(g) explains that when someone other 
than the SSI claimant uses money to pay the 
claimant's bills, that money is not counted as 
unearned income to the claimant. Rather, the 



GARY F1_ACK 



195 



food, clothing, or shelter the claimant 
receives in exchange for the payment may be 
considered in-kind income to the claimant: 



If your daughter uses her own money 
to pay the grocer to provide you 
with food, the payment itself is not 

your Income because you do not 

receive it . However, because of 
your daughter's payment, the grocer 
provides you with food: the food is 
in-kind income to you. 

20 C.F.R. § 416.1103(g) examples (emphasis 
added ) . 



Third, SSR 82-31 does not accord with the 
Secretary's own admission that VA benefits 
based on need may not be "deemed" the income 
of the veteran's dependent. Within a family, 
"[t]he first step in deeming is determining 
how much income [the claimant's] ineligible 
spouse [or] ineligible parent . . . has." 20 
C.F.R. § 416.1161. The key rule governing the 
first step is that SSA does not consider 
available for deeming all of the spouse's or 
parent's income. Id. Specifically, SSA does 
not include as income available for deeming 
"[a]ny public income-maintenance payments (5 

416.1142(a)) Tthe claimant's] ineligible 

spouse or parent receives ." § 416.1161(a)(2) 
( emphasis added ) . 

The SSI regulations list several programs that 
make public income-maintenance payments. 20 
C.F.R. § 416.1142(a). One type of public- 
income maintenance payment is a payment made 
under "U.S. Veterans Administration programs 
( those payments based on need ) . " § 
416.1142(a)(7). 



SSR 82-31 automatically counts the dependent's 
portion of VA benefits as unearned income to 
the veteran's dependent. The SSI regulations 
reveal that the dependent ' s portion of VA 
benefits may never be counted directly as 
unearned income to the dependent, and may only 
sometimes indirectly be deemed or counted as 



196 



GARY FLACK 



in-kind income to the dependent. SSR 82-31 is 
therefore inconsistent with the SSI 
regulations . 

Paxton 1354-1359 footnotes omitted. This is the only Court of 
Appeals decision on this issue. The Paxton rationale is sound and 
should be accepted by the Social Security Administration. Most 
district courts which have considered this problem have similarly 
resolved it. 

White v. Sullivan . 813 F.Supp. 1059 (D.Vt. 1992) concluded 
that Social Security Ruling 82-31 was not consistent with the 
Social Security Act, 42 U.S.C. § 1382a(a)(2)(B) in that the 
"augmented" VA pension is not "received" by SSI claimants. White 
declared the Ruling to be invalid as applied to a class of all 
applicants and recipients residing in Vermont. The court enjoined 
the Secretary from applying Social Security Ruling 82-31 to class 
members. The White court noted that VA pensions are paid to the 
veteran and not to his dependent (SSI applicant). The dependent 
did not necessarily "receive" the augmented portion of VA benefits 
for the purposes of 42 U.S.C. § 1382(a)(2)(B). Id. at 1065. 
Therefore, the Secretary may not count these funds as unearned 
income when calculating such claimant's SSI entitlement. Since the 
veteran may spend the augmented portion of his VA pension to meet 
his own needs, the SSI claimant does not necessarily receive any 
economic benefit from the VA payments. Accordingly, the dependent 
VA increment is not unearned income to the dependent for SSI 
purposes. Stated another way, the court reasoned that the SSI 
claimant never attained dominion over the augmented portion of the 
VA benefits and could therefore never necessarily apply these funds 
to meet his or her basic needs. The White decision also noted 
other conflicts between SSR 82-13 and other regulations of the 
Secretary. Id- at 1066. 

Inman v. Sullivan . 809 F.Supp. 659 (S.D.Ind. 1992) 
similarly held for the SSI claimant. It declared SSR 82-31 
invalid. It began its analysis by concluding that the SSI claimant 
does not receive the augmented portion of the VA benefits. It 
recognized the argument accepted by the Paxton court that when 
unearned income is used for calculating SSI eligibility, the 
amounts are "usually related to claimant's prior work or service" 
20 C.F.R. § 416.1121(a). However, the augmented portion the 
veteran receives is due to his prior service, not his dependent's. 
SSR 82-31 provides no rationale for this exception to the 
Secretary ' s more general regulations . 

Sprouse v. Sullivan , 738 F.Supp. 999 (E.D.Va. 1990) adopted 
the Magistrate's Report and Recommendation. It relied on the 
Tsosie v. Califano r 651 F.2d 719 (10th Cir. 1981), and upheld the 
Secretary's position. Tsosie did not consider Social Security 
Ruling 82-31. Indeed, Tsosie was one of the reasons that the SSR 
82-31 came into existence. It is curious the Sprouse decision is 



197 



GARY FLACK 



so poorly grounded. 

Ryder v. Sullivan , 804 F.Supp. 1365 (D. Col. 1992) is a very 
short decision that rules in favor of the SSI claimant primarily in 
reliance on Paxton . Although Colorado is in the Tenth Circuit, 
Ryder relied on the Ninth Circuit Paxton decision instead of the 
earlier Tsosle decision. 

Kennedy v. Sullivan , cited in Inman apparently rules that 
Social Security Ruling 82-31 is invalid. See Inman at 662. 
Kennedy is a class action. 138 F.R.D. 484 (N.D.W.Va. 1991). 

The validity of Social Security Ruling 82-31 also has been 
undermined by a nationwide class action, Anderson, et al. v. 
Sullivan , No. CV-88-036-GF (D. Mont. Nov. 21, 1989). Pursuant to 
this action, the Secretary was ordered to promulgate regulations 
that provide that the augmented portion of veteran's pension is not 
to be counted as unearned income to either the veteran or the 
veteran's surviving spouse. The new regulations' rescission of 
part of SSR 82-31 undermine the validity of the remainder Social 
Security Ruling 82-31. 

I am uncertain whether it is appropriate to have legislation 
resolve this administrative error. However, in an effort to 
"create dialogue, " I bring this problem to your attention. The 
proper calculation of SSI benefits when an applicant ' s spouse 
receives "augmented VA benefits" is being poorly handled by the 
Social Security Administration. The Social Security Administration 
should rescind Social Security Ruling 82-31. 



198 




819 South Wabash 

Suite 300 

Chicago. Illinois 60605 

(312)663-1130 

F«x: (312)663-0504 



HONORARY BOARD 

OF DIRECTORS 

WESTON R. CHR1STOPHERSON 

DONALD C. CLARK 

JOHN R. CONRAD 

DONALD N. FRET 

MARY CAMERON FREY 

JAMES S. KEMPER. JR. 

EPPTE LEDERER 

DONALD S.PERKINS 

ALBERTA. ROBIN 

RAYMOND C. TOWER 



October 27, 1993 



BOARD OF DIRECTORS 



EDGAR B. ALVARADO 
JIMBIVENS 
CAROLYN CHAPMAN 
WILLIAM P. CLARKE 
SANDRA DEHNERWHEELER 
LYNN R. DILLON 
ROBERT GALUANI. D.D.S. 
THOMAS C. CRADY 
BRADLEY J. HOLDEN 
MONICOHUBER 
WARNER T. HUGHES 
SUE-ANN IRWIN 
WILLIAM R. JENKINS 
MEARL J. JUSTUS 
JACKF. LASDAY 
SPENCER LEAK 
MICHAEL McCABE 
RICHARD L. MeCULLOUCH 
JAMES B. MORAN 
THOMAS RICKE 
NORMAN RIDLEY 
CARYS.SAUT 
WILLIAM N. SETTERSTROM 
EUGENE F. SIKOROVSKY 
JEFF T. SMITH 
VICTOR P. STASICA 
JOHN X.THOMAS 
BOBW.TICE.JR. 
BRUCEA.TOTH 
RAULVILLALOBOS 
ALFRED C. WHITLEY 
NICHOLAS S. ZACONE 



Janice Mays 

Chief Counsel and 

Staff Director 

Committee on Hays and Means 

U.S. House of Representatives 

1102 Longvorth House Office Bldg. 

Washington, DC 20515 



Dear Ms. Mays: 

The following statement is submitted by Gateway 
Foundation for the printed record of the hearing on 
Supplemental Security Income: 

As we approach national health care reform, we must look 
at the 5.5 million people who are addicted to alcohol and 
other drugs in the United States. It is estimated the 
total economic cost of smoking, drinking and drugs was a 
staggering $238 billion in 1990 alone, as reported in the 
October 22, 1993 CHICAGO TRIBUNE. 

While these statistics are startling, even more shocking 
is that Supplemental Security Income — a recovering 
addict's only financial aid to assist in the transition 
back into society — is being threatened with 
discontinuation . 

As it stands now, a substance abuser, deemed to be 
severely disabled because of a prolonged history of 
substance abuse, is entitled to collect SSI. A condition 
of receiving benefits, the recipient must undergo 
treatment in an approved program. Herein begins the 
problems . 

Substance abusers are not always referred to treatment in 
a timely manner, often a result of lacking funds for such 
treatment, or a lack of knowledge of existing programs. 
Gateway Foundation alone has 950 people on a waiting list 
for treatment, with an additional 9,000 waiting at other 
programs throughout Illinois. However, Gateway is very 
successful with clients who receive SSI. This is 
evidenced by our many recovering staff members whose SSI 
payments enabled them to become productive members of 
society. 



(more) 



199 



If SSI payments were easier to obtain, disbursed in a 
timely manner, and if they were discontinued when 
appropriate, the system would justly help thousands more 
to lead drug-free lives. 

In contrast, the system fails us when a recovering 
substance abuser who has been out of treatment for some 
time receives a lump-sum disbursement for thousands of 
dollars. SSI payments can often do more harm in this 
instance. Better tracking, management, and disbursement 
of payments would not only ensure proper use of funds, 
but would get more people into the treatment centers 
where help, hope and recovery are possible. 

Attached is the story of Rose, a former addict, Gateway 
graduate and employee. Her story exemplifies how SSI 
helps people in their transition into society. She had 
a 20 year heroin addiction, a 2 month old baby, and very 
little hope. With 15 months of extended care treatment 
at Gateway Foundation, she learned the skills to be a 
responsible member of society. She now works at Gateway 
as a client advocate and helps others qualify for SSI, 
others who stand in shoes she knows all too well. 

SSI provides the means for people to enter treatment; it 
enables them to become eligible for Medicaid. This 
becomes the only payment option for treatment for 
thousands like Rose who can successfully recover. 

With extended care treatment, success rates are even 
higher. Research has proven that the amount of time in 
treatment is a major variable in recovery. SSI payments 
during the period of disability allow many the 
opportunity to get extended care treatment and develop 
the necessary skills to beat alcohol and other drug 
addiction and live productive, healthy, drug-free lives. 



Sincerely, \ 



ccMxuJl &a^-^ 



Michael Darcy 
President 



200 



Five years ago I entered treatment for a 20 year heroin 
addiction. I will not recount all of the ugliness that 
most addicts and those around them suffer, suffice it to 
say that recovery had truly become a life or death 
condition. I also had a two month old daughter who would 
have open heart surgery at nine months of age in order to 
survive, probably attributable to the fact that my 
disease was out of control. I didn't really believe that 
I could recover. But there was help for me. That help 
came through long-term residential rehabilitation 
treatment. Under the guidance and supervision I received 
in 15 months of treatment, I was able to address many of 
the issues I needed to allow me to attempt a drug-free 
life and become a responsible member of society. Thanks 
to Gateway Foundation's client advocate who assisted me 
in applying for Social Security benefits, after I 
completed treatment, I was awarded just about enough 
money to cover my bill for treatment, approximately 
$2,500.00. After treatment, I regained custody of my 
daughter who continues to have some medical issues which 
require close monitoring.... 

Needless to say, had I been saddled with a $2,500.00 bill 
at the onset of our new life, in addition to the 
pressures of learning how to live without the use of 
drugs, my daughter and I may not be where we are today. 

Today I work in the capacity of a client advocate. I now 
am in a position to assist new residents in applying for 
SSI benefits, many of whom are mothers with children and 
facing the same predicaments I have lived through. Most 
of us have had no previous work history and little 
education. I do not need to tell you the 
disproportionate amount of our population which lives 
below the poverty level. 

If these benefits were not available to help us at least 
make the transition of addict to responsible individual, 
faced with the overwhelming task of resuming 
responsibility for ourselves and our children, many of us 
would resort back to "what we know". Simply put, the 
Department of Corrections would be caring for the mothers 
and the Department of Children and Family Services for 
the children. 

(more) 



201 



It is unrealistic for our government to think that 
eliminating the SSI benefits given to those of us who 
desire to break out of a cycle of drugs and crime (and 
they go hand in hand) and who utilize these benefits in 
a fashion in which they were intended to be of some help, 
so that those who would abuse them would be unable to do 
so, is an option. This is truly throwing the baby out 
with the bath water. 

### 



202 



WRITTEN TESTIMONY OF: 

JOEL M. CARP 

ASSOCIATE EXECUTIVE DIRECTOR 

JEWISH FEDERATION OF METROPOLITAN CHICAGO 

Congressman Ford - Chairman of the Subcommittee on Human 
Resources, and distinguished members of the Committee, as a member 
of the Chicagoland SSI Coalition and as a representative of the 
Jewish Federation of Metropolitan Chicago, I am pleased to have the 
opportunity to share the Jewish community of Chicago's experiences 
and thoughts concerning Supplemental Security Income (SSI) with 
you. 

Since 1971, the Jewish Federation of Metropolitan Chicago has 
resettled almost 20,000 (more than 13,000 since 1987) Jewish 
refugees from the former Soviet Union through a program involving 
eleven of our affiliated and beneficiary agencies, including two 
hospitals in the Chicago area. One of the Federation's affiliate 
agencies, the Council for Jewish Elderly (CJE) , serves more than 
8,000 older adults each year and provides a variety of services 
aimed at maintaining independence and community living. These 
services are provided to individuals of all income levels and 
physical abilities on an as needed basis. 

Many of the clients served by CJE are either low income and 
receiving benefits, or are potentially eligible for benefits from 
the Supplemental Security Income (SSI) program. Almost without 
exception, these elderly immigrants have left the former Soviet 
Union to accompany or rejoin family members living in the United 
States. 

The main issue facing CJE's clients who receive SSI is that of 
income security. SSI was designed as a means tested "safety net" 
program, but has failed to fulfill it's mission to protect lower 
income seniors from destitution. With the current Federal benefit 
standard at 75 percent of the poverty level and the resource limit 
at $2,000, it is very difficult for a senior on SSI to afford the 
basic necessities of food, clothing and shelter. In a few short 
months, when the poverty levels are adjusted, the gap between the 
SSI benefit standard and the minimum required to be at the poverty 
level will widen. SSI recipients will receive only a 2.6 percent 
cost-of-living increase effective January 1, 1994, the smallest 
increase since 1987 and the second lowest in two decades. 

Most of the elderly refugee population resettled in the U.S. 
qualify for SSI through the SSI - Aged Program, some through the 
SSI - Disability Program. We are aware of the concerns of Congress 
regarding inappropriate access of immigrants to the SSI 
Disability Program, in some areas of the country. This is not the 
case in Illinois . Further, immigrants should not be unfairly 
blamed for the shortcomings of an outdated administrative system 
badly in need of "modernization", for the inadequacies of state or 
locally managed programs. The system needs to be looked at in 
terms of protecting not further limiting access to the SSI program. 

We fully support the program improvements proposed by the SSI 
Modernization Panel intended to improve the quality of care and 
services to persons who are aged, blind, or disabled. We would 
like to especially emphasize several of those recommendations. 

• Increase Social Security Administration (SSA) staffing bv 
6 . 000 . Increased staffing would assist in resolving the 
backlog of SSI claims and would increase the efficiency 
and effectiveness of program administration. Further, it 
would allow the SSA to implement several of the SSI 
Modernization Panel's recommendations. One such 
recommendation involved conducting face to face 
interviews before claims can be denied on the basis of 
disability. These interviews should be conducted by 
trained disability experts who are SSA field office 
employees . We would also recommend that face to face 
interviews be conducted in certain cases where 
discrepancy or doubt exists before claims are approved. 



203 



• Increase the Federal benefit standard for SSI over a 
period of five years so that it reaches 120 percent of 
the poverty guidelines by the fifth year . It is simply 
unjust and indefensible to keep such an at-risk 
population destitute and on the brink of homelessness as 
a consequence of public policy. 

• Change the resources test from $2.000 for an individual 
and $3.000 for a couple to $7,000 for an individual and 
$10.500 for a couple and streamline the exclusions. The 
increased resource limits combined with fewer 
restrictions would not only assist SSI beneficiaries but 
also assist the SSA in more efficiently and effectively 
managing use of staff time and resources while making SSI 
more accessible to those eligible. 

• Repeal the law which requires that receipt of in-kind 
support and maintenance (food, clothing and shelter) must 
be considered as income . The current standard undermines 
the continued voluntary support by family members and 
community based organizations . Additionally, elimination 
of this law would further decrease administrative 
complexity and cost . 

• Lower the age requirement for SSI from the current 65 to 
age 62 over a three year period . Many individuals who 
emigrated to this country from the former Soviet Union 
and who are between the ages of 62 and 65 were already 
retired in their homeland. Most importantly, in today's 
job market, there is less and less chance of obtaining 
gainful employment in the U.S after age 60. In addition, 
lowering the age limit to 62, creates greater consistency 
with social insurance retirement programs, and benefits 
all individuals eligible for SSI. 

• Establish a specific funding stream to assure 
continuation of outreach activities . Additional funding 
to develop more outreach projects, especially for the 
elderly and limited English speaking populations, would 
help to ameliorate the issue of individuals paying 
"middlemen" in order to apply for benefits. 

As you are aware, many Americans are becoming increasingly 
anxious about the economic stability of the United States. In the 
media, immigrants and refugees have been wrongly portrayed as the 
cause of the social and economic problems of this country. The 
fact is that there is hard data consisting of tax and economic 
studies, labor force analyses, a^id employment data that clearly 
shows just the opposite. In Illinois, for example, for every $1 
invested in refugee employment and training programs, we save $2.50 
in welfare costs. However, the negative publicity, combined with 
the reality of federal and state budget deficits and stubbornly 
high unemployment rates, has contributed to a growing resentment of 
refugees and immigrants and subsequent outbreak of racially 
motivated hate crimes across the United States. 

In addition to mass media, public policy plays a tremendous 
role in shaping public opinion. We urge you to reconsider the very 
dangerous method currently being proposed for financing the 
extension of unemployment security benefits. We agree that 
unemployment benefits should be extended, but not at the expense of 
persons in poverty. The impact of preventing legal aliens' access 
to SSI for five years strikes most heavily on U.S. citizens who 
sponsor their elderly immigrant parents and then struggle to 
support them. Limits to access not only hurts the family but also 
increases the burden on states and localities to pay for other 
welfare programs for elderly permanent residents who have nowhere 
else to turn. 



204 



There is no question that immigrants and refugees have heloed 
to periodically revitalize our economy through job creation 

lnd^d rC f^ ar - 1C ^ ati ° n ' ^ yment of taxe/and cultural enrichment' 
Indeed, this is the very history of our country. 

„<= ^ ThS ?i versitv that results from immigration is a unique source 
of strength for our nation, particularly at a time when we neld to 
enhance our competitive edge in the global marketplace. It is in 
Z * nat i onal interest to welcome the families of those who work 
hard and contribute so much to our country. 

u,h** "! encoura 9. e _ J " to take a stand on this issue and correct 
what is wrong, without wronging what is right and just. Thank you 
for the opportunity to share our concerns with you Y 






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Testimony for Subcommittee on Human Resources 

Ways & Means Committee 

U.S. House of Representatives 

October 14, 1993 

Submitted by Rhoda Schulzinger, Director of Children's SSI 
Campaign and Joseph Manes, Co-Director of Government Relations 

The Judge David L. Bazelon Center for Mental Health Law is a 
national nonprofit advocacy organization, formed in 1972 and 
until 1993 called the Mental Health Law Project. For over a 
decade, the Center has worked to improve access to the SSI 
program for children with disabilities. Our testimony will 
concentrate on three themes: (1) how families use SSI benefits 
(2) misperceptions in the education community about SSI and (3) 
how Congress might reduce barriers to children's SSI benefits. 
But first, we want to describe our Children's SSI Campaign. 

Currently, we are in the third year of a national outreach 
campaign to find and refer children who may be eligible for SSI 
benefits because of their physical, mental or emotional 
disability. We organized the Children's SSI Campaign to help 
publicize significant changes in the children's disability rules 
that enable more children to qualify for benefits. The campaign 
is a joint effort with Community Legal Services of Philadelphia, 
the Youth Law Center and National Center for Youth Law in San 
Francisco and Rural Legal Services of Tennessee and is funded by 
four private sources: The Robert Wood Johnson, The Nathan 
Cummings and The Annie E. Casey Foundations and The Pew 
Charitable Trusts. 

The Children's SSI Campaign has enlisted a wide range of 
people working with potentially eligible families -- social 
service workers; elected and appointed officials; nurses and 
doctors; teachers and early intervention specialists; community 
leaders; parents; and children's and disability advocates across 
the country. Bazelon Center staff coordinates activities with 
more than 50 national organizations to inform their members about 
changes in the children's SSI eligibility rules and to recommend 
ways to assist eligible families. We also provide technical 
assistance and information to non-profit and state agencies in 
over 20 states. 

In December 1991, around the time the campaign began, there 
were 438,853 children receiving SSI benefits. In May 1993, there 
were 720,458 children receiving benefits, an addition of 281,605 
children which represents a 64% increase in enrollment. Some of 
the increase is attributable to the re-evaluation of children 
mandated by the U.S. Supreme Court in the Zeblev class action 
lawsuit. A portion of the increase are the children who now 



206 



qualify under updated medical criteria and a new disability 
determination process. And the rest of the increase is due to 
increased publicity and outreach efforts. 

When we began the campaign, we estimated that 1 million 
children were eligible, but 58% of them were not receiving 
benefits. Since that time, changes in the financial eligibility 
rules for children under 18 increased the number of families who 
qualify. In addition, the most recent data from the U.S. Census 
Bureau indicates that child poverty is more prevalent than 
earlier estimated. Consequently, we believe that there are 
additional hundreds of thousands of eligible children who have 
not applied for benefits. 

How Families Use SSI Benefits 

The Committee should note that SSA reported in December 
1992, the average federal monthly payment for SSI children with 
disabilities was $387. This amount is almost 92% of the maximum 
monthly payment, indicative of the low overall family income of 
participants in this means-tested program. 

In recent months, stories have appeared in the press in 
several states alleging that parents are misusing the monthly 
payments intended to help their children. Obviously, we are 
unable to affirm or refute the validity of unsubstantiated 
allegations. Rather, we would like to balance the stories in the 
press with family experiences brought to the attention of the 
Children's SSI Campaign staff. 

The campaign staff regularly hear from families who are 
struggling to meet daily expenses and the costs of their child's 
special needs. Some parents are using the cash to cover the 
costs of shelter, food, home modifications and the costs of their 
child's special needs. For example, the child with cystic 
fibrosis, learning disabilities, attention deficit disorder and 
serious allergies who has a monthly pharmacy bill of over $2000. 
The family whose child has cerebral palsy who used the benefits 
to buy a van specially equipped with a chair lift so the child 
can go to doctor's appointments, receive regular therapy and 
accompany the family on weekend outings. The family who takes 
their child to a clinic 15 times a year and can only afford the 
$25 co-payment for each visit to continue treatment for the 
child's spina bifida because of her SSI benefits. 

Most frequently, we hear from families who need the SSI 
check to pay for items not covered by Medicaid. Despite the 
promise of the Medicaid EPSDT provisions, there are not enough 
Medicaid providers for children with special health care needs 
and state agencies frequently deny requests for special equipment 
and medical supplies. Among the items that families must buy 



207 



are creams for debilitating skin conditions, diapers for older 
children, respite care and special learning toys. 

Other families relate stories of how they must supplement 
services available from local school districts. A family reports 
that their child who has a significant hearing disability, 
attention deficit disorder and an IQ of 72 can receive speech and 
language therapy only twice a week through his school . But the 
child' s therapist recommends more frequent assistance so the 
family pays $220 a month for private tutoring to ensure that the 
child will maintain his progress at school. Other families use 
the SSI check to pay for summer programs because the local school 
district has nothing to offer their children who have special 
needs . 

The stories we hear on a daily basis underscore the 
importance of allowing families to make their own decisions about 
how to spend SSI benefits. 

Furthermore, we believe that the Social Security 
Administration has provided sufficient protections against 
improper use of benefits through their representative payee 
regulations. The representative payee is the person who receives 
the SSI check on behalf of the eligible child and the payee must 
report every year to Social Security how the SSI money is spent 
for the child. If someone believes that SSI funds are used 
improperly by a child's representative payee, they can call the 
local Social Security office. Social Security will investigate 
alleged abuse of funds and, if proven, will appoint a new 
representative payee for the child. 

Misperceptions about SSI in the Education Community 

When the disability determination process for children 
changed, SSA expanded the list of people who can submit evidence 
for a child's application. As a result, teachers and school 
psychologists are now asked to provide information about their 
students who are applying for SSI. However, there appears to be 
widespread confusion about the disability process within the 
education community. 

Once SSA has proof of a medical condition, the child is 
assessed to determine if the condition significantly interferes 
with his or her ability to develop or to 'engage in activities 
other children the same age normally do. It is at this stage 
that educators are asked to provide their observations about 
their students' functional abilities. However, many educators 
have little or no knowledge of SSA's disability determination 
process. For example, most do not know that the regulations 
require proof of an underlying medical condition. Most educators 
do not understand that the definition of disability used by SSA 
and that used by school districts are quite different. As a 



208 



consequence, they do not know that a child may meet the goals of 
his or her individual education plan (IEP), but still qualify as 
"disabled" under Social Security's rules. 

School personnel often do not realize that they are only one 
source of information to support an application. By law, the 
disability examiner must collect evidence from many people who 
observe the child over a period of time -- parents, doctors, 
family friends and all types of therapists. By collecting 
evidence from many sources, the examiner ensures that different 
people verify the severity of a child's disability. Before making 
the final eligibility decision, the disability examiner must 
determine that any test results are consistent with other 
evidence about the child's behavior and daily activities. If 
there are inconsistencies, the regulations require the examiner 
to obtain more documentation of the child's development and 
functioning to resolve the differences. 

Many children with behavioral disorders have serious 
underlying physical or psychological problems that may not be 
known to a classroom teacher. Children with minor behavioral 
problems will not qualify for SSI. To be eligible, children must 
have a severe mental or physical condition that substantially 
interferes with age -appropriate development and functioning. 
Younger children must prove that they are not meeting age- 
appropriate developmental milestones and older children must 
prove that they cannot perform age -appropriate daily activities. 

Reducing Barriers to Children's SSI Benefits 

The SSI children's program has grown rapidly in the last few 
years as the Zeblev population has finally received appropriate 
review and as the eligibility rules were revised. However, we 
believe that there are still hundreds of thousands eligible 
children who are not receiving benefits. The Committee should 
eliminate the continuing barriers in law and practice that 
prevent eligible children from receiving assistance which could 
improve their lives. 

In 1989, the ".."ays and Means Committee recognized the gap 
between the number of children receiving SSI benefits and those 
potentially eligible. In OBRA '89, Congress mandated that SSA 
engage in "ongoing" outreach to children (Section 1635) . 
Unfortunately, the Congressional mandate has yet to be 
implemented at the local district office level. Although the 
efforts to find Zeblev class members was significant, on-going 
outreach to find newly eligible children is not part of SSA' s 
daily routine. 

As best we can tell, the "ongoing program of outreach" 
required by law has resulted in publication of a few pamphlets 
and posters, the designation of a coordinator in each region and 



209 



a few demonstration projects. To fully implement the 
Congressional mandate, we believe that SSA must do more. 

We recommend legislation to require SSA to establish an 
Office of Outreach Coordination to integrate the disparate 
efforts by the Office of Disability Policy, the Office of Public 
Relations and the Office of SSI Operations. The Office of 
Outreach Coordination would have the responsibility to create a 
focused and consistent program of outreach to children and other 
populations with high eligibility potential such as Native 
American families, homeless families and rural populations. 
The coordination office would be authorized to make grants and 
contracts with private and public organizations for a wide range 
of outreach techniques. The office would also serve as a 
clearinghouse of information on the most successful strategies. 

There are other ways that the Committee could help improve 
access to benefits for eligible children. The August 1992 report 
of the Panel of Experts to the SSI Modernization Project, led by 
Dr. Arthur S. Flemming contains made a number of recommendations 
to improve the program to better meet the needs of eligible 
recipients. Although there were dozens of recommendations, the 
following five benefit children and we endorse them 
wholeheartedly . 

1. Modify the rules for deeming family resources to a child with 
a disability to recogniz e other c hildren in the family. 

The SSI Modernization Panel of Experts recommended a change 
in the resource deeming rules to permit a $2000 resource 
allocation for each additional child in the family. The current 
limits on allowable resources do not consider the overall size of 
the family. As a result, families with several children cannot 
save for education, emergencies or numerous other needs without 
endangering the SSI benefits of the child with a disability. 
Furthermore, since deeming rules do not apply to a child who is 
institutionalized, the inadequacy of the current resource 
allocation encourages institutionalization as the only way the 
low- income family can obtain medical care for their child with a 
disability while also meeting the needs of the family' s other 
children. 

By contrast, the income deeming rules permit the family to 
allocate a portion of their income to each child without a 
disability living in the household. The allocation recognizes 
that daily expenses increase with the number of family members. 
For 1993, $218 of monthly income is allocated for each child 
without a disability living in the household and the amount is 
adjusted annually. 



210 



2 . Disregard special expenses for care of a child with a 
disability. 

The Panel recommended that SSA disregard the portion of 
family income used to pay for special expenses related to the 
child's disability. The disregard would recognize that families 
with children who have a disability have extraordinary expenses 
that are not offset by the SSI benefit. The special expenses 
could include communication devices or other adaptive equipment, 
medical equipment and medications, specialized transportation, 
respite care and special dietary needs. For example, one mother 
testified before the Panel that the cost of disposable diapers 
for her 13-year old child was $175 a month. One-time costs, such 
as making the house accessible, could be amortized over the life 
of the improvement . 

3. Change the way certain unearned income is treated. 

The SSI parental income deeming rules treat "earned" income 
(such as wages) more favorably than "unearned" income (such as 
Social Security benefits, veterans' benefits and interest 
payments) . The Panel recommended that Unemployment Insurance 
(UI) benefits, workers' compensation and disability insurance 
benefits received by parents of a child with a disability be 
treated as earned rather than unearned income. These benefits are 
intended as a substitute for earnings while the wage-earner is 
unable to work. 

SSA' s parental deeming rules counts a higher proportion of 
the parent's unearned income as "available" to the child than 
earned income. As a result, the child's benefit is lower if the 
family income is unearned rather than if the same amount were 
earned. For example, in a two-parent family with earned income 
of $1000, the child with a disability would receive the current 
maximum benefit of $434. In a family with unearned income of 
$1000, the child's benefit would be $126. 

If a parent loses his or her job and begins receiving 
unemployment benefits or is injured on the job and receives 
workers' compensation, the effect on the child's SSI benefit can 
be devastating. When the family is undergoing financial 
difficulties because of the wage-earner's unemployment or injury, 
social policy should not penalize it further with a reduction or 
loss of children's SSI benefits. 

Representative Stark's bill, HR 3009 introduced August 6, 
1993, includes a provision similar to the recommendation of the 
Modernization Panel which we strongly endorse. 



211 



4. Assure all SSI children have Medicaid protection. 

Since access to regular health care is so important to a 
individual with a disability, the Panel recommended that all SSI 
recipients, adults and children, be automatically eligible for 
Medicaid regardless of the state in which they live. 

In 31 states and the District of Columbia, an individual who 
is eligible for SSI benefits is automatically enrolled in 
Medicaid. In seven states, SSI-eligible individuals are 
automatically eligible for Medicaid, but must fill out a separate 
application: Alaska, Idaho, Kansas, New Hampshire, Nevada and 
Utah. Studies indicate that the need to file a separate 
application represents a barrier to children obtaining health 
benefits. 

Twelve states, representing approximately 20% of SSI 
children, have established separate, and more restrictive, 
income, resources and/or disability criteria for Medicaid 
eligibility based on criteria that were in effect in these states 
on January 1, 1972. These "209(b)" states are Connecticut, 
Hawaii, Illinois, Minnesota, Missouri, New Hampshire, North 
Carolina, North Dakota, Ohio, Oklahoma and Virginia. 

5. Protect Medicaid during months when parents are " over- income. " 

The Panel's recommendations would "deem" an individual 
eligible for SSI for purpose of retaining Medicaid coverage in 
months when five weekly (or three bi-weekly) paychecks resulted 
in the parent being " over- income. " Currently, when the child is 
ineligible for SSI for a month because the parent earned too 
much, the child also can lose Medicaid coverage for the month. 

The two recommendations on Medicaid require a collaboration 
with the Energy and Commerce Committee. 

As the Committee reviews the SSI program, we ask you to 
examine the continuing problems faced by families who have a 
child with a serious disability or chronic illness. We urge the 
Committee to eliminate the continuing barriers which make access 
to benefits difficult. SSI benefit payments are a vital element 
in holding families together and enabling children to obtain 
medical care and services which can ultimately lead to 
independence and productive lives as adults. 



WASHINGTON ( 



212 



Bnited States Senate 

WASHINGTON. DC 20510-4903 



COMMITTEES 
APPROPRIATIONS 



SMALL BUSINESS 
SPECIAL COMMITTEE 



STATEMENT OF U.S. SENATOR HERB KOHL (D-WI) 
Before the House Ways and Means Committee, 
Subcommittee on Human Resources 
October 14, 1993 

FIRST OF ALL, CHAIRMAN FORD, I WANT TO COMMEND YOD FOR HOLDING 
THIS HEARING ON THE SUPPLEMENTAL SECURITY INCOME PROGRAM. I APPEAR 
BEFORE YOU TODAY AS AN ADVOCATE OF THE DISABLED, BUT ALSO AS A 
SENATOR CONCERNED ABOUT HOW WE ARE SPENDING OUR FEDERAL TAX 
DOLLARS. 

I WANT TO BE CLEAR AT THE OUTSET, THAT I SUPPORT THE 
INTENTIONS OF THE SSI PROGRAM, ESPECIALLY AS IT RELATES TO DISABLED 
CHILDREN AND THEIR FAMILIES WHO ARE TRULY IN NEED OF THESE 
BENEFITS. HOWEVER, I DO HAVE SOME GRAVE CONCERNS ABOUT HOW 
EFFECTIVELY AND EFFICIENTLY THIS PROGRAM IS BEING CARRIED OUT. 

WITHIN THE PAST YEAR, MY OFFICE HAS RECEIVED NUMEROUS 
COMPLAINTS AND CONCERNS ABOUT THE SSI PROGRAM. INITIALLY, THE 
CONCERNS WERE JUST FROM WISCONSIN, BUT NOW WE ARE SEEING THEM FROM 
ALL CORNERS OF THE COUNTRY. 

IN JUNE I CONTACTED HEALTH AND HUMAN SERVICES SECRETARY DONNA 
SHALALA, AND REQUESTED THAT HER OFFICE OF THE INSPECTOR GENERAL 
LOOK INTO THESE COMPLAINTS. MANY OF THE CONCERNS WERE ANECDOTAL IN 
NATURE, AND I FEEL IT IMPORTANT THAT WE QUANTIFY ANY PROBLEMS IF 
THEY EXIST, BEFORE WE MAKE ANY CHANGES IN THE PROGRAM. AT THIS 
POINT, THE O-I-G AUDIT IS ONGOING, AND I ANXIOUSLY AWAIT THE 
RESULTS OF THE REVIEW. 

WHILE THE FINAL VERDICT ON THE SSI COMPLAINTS IS NOT YET IN, 
I DO WANT TO SHARE WITH YOU, THE COMMON CONCERNS ABOUT SSI 
EXPRESSED TO MY OFFICE. FIRST, THERE ARE REPORTS THAT SOME 
"UNQUALIFIED" CHILDREN ARE SOMEHOW MANAGING TO SKIRT THE SYSTEM, 
AND QUALIFY FOR BENEFITS THEY DO NOT NEED OR DESERVE. THERE ARE 
EVEN ACCUSATIONS THAT SOME PARENTS MAY BE "COACHING" THEIR CHILDREN 
TO MISBEHAVE IN SCHOOL AND PURPOSELY FAIL TESTS, ALL IN AN ATTEMPT 
TO GET SSI BENEFITS. 

DISABILITY ADVOCATES SAY THIS SCENARIO IS HIGHLY UNLIKELY, 
THAT THERE ARE TOO MANY CHECKS ALONG THE WAY THAT WOULD CATCH 
ANYONE TRYING TO FAKE THEIR WAY INTO QUALIFYING FOR SSI BENEFITS. 
THAT MAY BE SO, BUT WE ARE HEARING ABOUT COMPLAINTS OF "COACHING" 
FROM ALL OVER THE COUNTRY. EVEN IF MANY OF THESE "COACHED" ATTEMPTS 
ARE ULTIMATELY UNSUCCESSFUL, IT IS CLEAR THAT SOME PEOPLE ARE AT 
LEAST TRYING TO CHEAT THE SYSTEM. AGAIN, THIS IS SOMETHING I HOPE 
BECOMES CLEARER IN THE O-I-G AUDIT. 

MILWAUKEE OFFICE: MADISON OFFICE: KENOSHA OFFICE EAU CLAIRE OFFICE: APPLETON OFFICE: 



PHINTEO ON RECYCLED PAPER 



213 



THE SECOND COMPLAINT IS REALLY THE OPPOSITE OF THE FIRST. WE 
ARE HEARING COMPLAINTS THAT SOME CLEARLY DISABLED YOUNGSTERS, ARE 
STILL BEING UNFAIRLY DENIED BENEFITS. I AM FAMILIAR WITH A CASE 
FROM MILWAUKEE INVOLVING A YOUNG CHILD WITH SEVERE ASTHMA WHO FROM 
ALL INDICATIONS CLEARLY DESERVED SSI BENEFITS, YET WAS DENIED. HIS 
MOTHER HAD TO SEEK LEGAL HELP, AND FINALLY AFTER TWO APPEALS, THE 
BENEFITS WERE APPROVED. 

WHILE THE ULTIMATE GOAL OF PROVIDING HELP TO THIS CHILD WAS 
REACHED, I AM CONCERNED THAT HE AND HIS MOTHER HAD TO UNDERGO 
LENGTHY AND UNNECESSARY APPEALS. IT IS MY HOPE THE O-I-G AUDIT, AS 
WELL AS AN INTERNAL SOCIAL SECURITY ADMINISTRATION REVIEW, WILL 
GIVE US A CLEARER PICTURE ON HOW MANY OTHER CHILDREN ARE BEING 
WRONGLY DENIED OR WRONGLY APPROVED. AS WE ALL KNOW, THE SUPREME 
COURT DECISION IN THE ZEBLEY CASE MEANT EXTENSIVE CHANGES IN THE 
RULES, AS WELL AS A MASSIVE, SIXFOLD INCREASE IN SSI APPLICATIONS. 
I AM SURE THAT BOTH OF THOSE EVENTS ARE THE DRIVING FORCE BEHIND 
SOME OF THE SCREENING PROBLEMS. 

THE THIRD AND PERHAPS MOST PERVASIVE COMPLAINT WE SEE, DEALS 
WITH HOW SSI BENEFITS ARE BEING SPENT. AS I UNDERSTAND IT, PARENTS 
HAVE A GREAT DEAL OF LATITUDE ON HOW THEY SPEND THE BENEFIT CHECKS . 
I BELIEVE PARENTAL DISCRETION IS VERY IMPORTANT, BECAUSE THE 
SPECIFIC NEEDS OF DISABLED CHILDREN VARY GREATLY. FOR EXAMPLE, A 
CHILD WITH CEREBRAL PALSY HAS FAR DIFFERENT NEEDS THAN A CHILD WITH 
ATTENTION DEFICIT DISORDER, SO PARENTAL FLEXIBILITY IS CRUCIAL. 

BUT WHILE DISCRETION IS IMPORTANT, IT CAN ALSO OPEN THE DOOR 
TO ABUSES. I AM AWARE OF A CASE IN MICHIGAN, WHERE A PARENT BOUGHT 
A MOTOR HOME WITH THE SSI BACK PAYMENTS, THEN TOOK HER CHILDREN OUT 
OF SCHOOL FOR A CROSS COUNTRY TRIP. WHAT POSSIBLE BENEFIT COULD BE 
DERIVED FROM THESE CHILDREN MISSING SCHOOL FOR SEVERAL WEEKS? THIS 
IS CLEARLY NOT WHAT SSI IS FOR. 

MY OFFICE HAS RECEIVED NUMEROUS OTHER REPORTS OF HIGHLY 
QUESTIONABLE EXPENDITURES AND THAT CONCERNS ME BECAUSE SSI IS 
SUPPOSED TO BENEFIT THE CHILD. SOME PSYCHOLOGISTS HAVE EVEN TOLD US 
THAT CHILDREN QUIT THEIR COUNSELING UPON BEING APPROVED FOR SSI . TO 
ME THAT IS COUNTERPRODUCTIVE TO THE GOALS OF THE PROGRAM. IN SHORT 
WE NEED A BETTER WAY TO MONITOR EXPENDITURES, AND ALSO GIVE PARENTS 
GREATER GUIDANCE IN HOW TO SEEK HELP FOR THEIR YOUNGSTERS ONCE 
BENEFITS ARE APPROVED. 

ONE VERY CLEAR PROBLEM IN THE AREA OF EXPENDITURES INVOLVES 
THE LARGE LUMP SUM BENEFITS PAYABLE UNDER THE ZEBLEY DECISION. IN 
SOME CASES THE CHILD RECEIVES UP TO $30 THOUSAND IN BACK BENEFITS, 
BECAUSE THE SUPREME COURT RULED THEY WERE WRONGLY DENIED A DECADE 
AGO. THE PROBLEM IS THAT SSI RULES SAY THE PARENTS MUST SPEND 
NEARLY ALL OF THAT MONEY WITHIN SIX MONTHS, OR RISK LOSING 
CONTINUING BENEFITS. I KNOW THERE ARE TRUST OPTIONS, BUT WE ARE 
TALKING ABOUT LOW INCOME RECIPIENTS WHO MAY NOT HAVE THE LEGAL 
KNOWLEDGE OR ACCESS TO COMPLICATED TRUST AGREEMENTS. 

WE SIMPLY HAVE TO MAKE A MORE USER FRIENDLY TRUST ARRANGEMENT 



214 



AVAILABLE, SO THAT PARENTS CAN SET MONEY ASIDE FOR FUTURE BENEFIT 
OF THE CHILD. AS IT STANDS NOW, WE ARE SIMPLY ENCOURAGING THEM TO 
SPEND A LARGE SUM OF MONEY, AS QUICKLY AS POSSIBLE, AND IN DOING SO 
THEY AREN'T ALWAYS SPENDING THE MONEY WISELY OR IN THE CHILD'S BEST 
INTERESTS . 

OVERALL, I BELIEVE SSI IS A WELL INTENTIONED PROGRAM, AND WHEN 
IT BENEFITS A DISABLED CHILD IT IS A GOOD PROGRAM. BUT BASED ON THE 
NUMBER OF CONCERNS RAISED, IT IS MY BELIEF THAT THE SSI PROGRAM IS 
NOT WITHOUT PROBLEMS. IT WAS MY GOAL WHEN I ASKED FOR THE O-I-G 
AUDIT, THAT WE FIND OUT JUST HOW WIDE SPREAD THESE PROBLEMS ARE, 
AND TAKE APPROPRIATE ACTION. 

WITH THAT IN MIND, I ANXIOUSLY AWAIT THE INSPECTOR GENERAL'S 
FINDINGS SO THAT WE MIGHT TAKE WHATEVER CORRECTIVE STEPS ARE 
NECESSARY. IN DOING SO, IT IS MY HOPE THAT WE ALL KEEP IN MIND OUR 
ULTIMATE GOAL, THAT IS THE WELL BEING OF OUR DISABLED POPULATION, 
ESPECIALLY CHILDREN IN NEED. 

MR. CHAIRMAN THAT CONCLUDES MY REMARKS, AND I AGAIN WANT TO 
THANK YOU AND THE SUBCOMMITTEE FOR ADDRESSING THIS IMPORTANT ISSUE. 



215 



Statement of Honorable Carrie P. Meek 

Subcommittee on Human Resources 

October 14, 1993 



Mr. Chairman, I want to commend you for holding this hearing today. It is all too easy 
for SSI to be pushed aside while so many other important issues come to the forefront, and I 
appreciate the opportunity to testify about this program and about the legislation I have 
introduced. 

When I came to Congress earlier this year, one of my goals was to work on behalf of 
those who are most in need. I was particularly concerned about the plight of poor elderly 
women. I learned that for many of these women SSI was a critical source of support even 
though it only provided enough income to bring them to less than 75 % of the poverty guidelines. 
I was pleased to learn of the work of the Supplemental Security Income Modernization Project 
and the excellent report done by the experts led by the distinguished Arthur S. Flemming. I 
believe that the recommendations of the report must be implemented, and that is why I 
introduced legislation, H.R. 2676, which incorporates some of the most important ones. 

SSI is the only federal program that seeks to provide a minimum income to some of our 
impoverished people. It serves the aged, blind, and disabled, and we should be proud of the 
accomplishments of the program in providing some measure of dignity to the lives of millions 
of Americans. SSI has fallen well short of the goal, however, that was expressed in the report 
of the Senate Finance Committee in 1972 when SSI was established. The committee foresaw 
a program that would "provide positive assurance the Nation's aged, blind and disabled people 
would no longer have to subsist on below-poverry-level incomes. " Twenty-one years later, we 
are well short of that goal. 

The Modernization Project's major recommendation is to phase in an increase in benefit 
levels over five years, so that incomes would reach 120% of HHS poverty guidelines. I have 
included this recommendation in my bill and this is the centerpiece of SSI reform. There is 
ample precedent for using standards higher than 100% of poverty guidelines. Food stamp 
eligibility, for example, is as high as 130%. The report of the experts provides additional 
examples. 

The SSI benefit standard in 1992 was 74.4% of poverty guidelines for an individual and 
82.7% for a couple. I maintain that this is barely sufficient. If our goal is to lift the aged, 
blind, and disabled out of poverty, then we should do so. Witnesses who provided testimony 
to the panel of experts recounted numerous stories of SSI recipients who had to choose among 
necessities. One health care professional said the following: 

The SSI eligibility limits and living-expense allowances can be dangerous to 
health, in my view. The program excludes too many needy persons and gives too 
little to those it includes. ... To eat nutritiously, some may scrimp on 



216 



necessities of life other then food. Some often try to stretch out their drug 
supplies by taking less than the recommended doses. They live in dangerous 
housing: accidents are waiting to happen because of poorly maintained structures 
and poor lighting. At risk of hypothermia, they have trouble paying the bills for 
cooling and auxiliary heating. They have heart trouble and they live in walk-ups. 
Taking a bus ride is risky and taxis are too expensive if they need to reach a 
medical clmic. 

Mr. Chairman, this is not the picture Congress had in mind when SSI was established more than 
twenty years ago. 

Because of these low eligibility and benefit levels, exclusions from resources have 
proliferated in order to help people maintain eligibility. The result is a very complicated system 
that makes administration of the program more costly. The experts recommended increasing 
resource eligibility standards and simultaneously reducing the number of exclusions. My bill 
eliminates some of the exclusions, but I would encourage the subcommittee to do a complete 
review. I addressed only those exclusions included in Tide XVI of the Social Security Act, but 
many others exist. With adequate resource limits and realistic income eligibility levels, most 
exclusions would not be necessary. 

I also strongly support the recommendation to eliminate in-kind support from the 
determination of income. Such support is food, shelter, or clothing given to a person or 
received by that person because someone else paid for it. Receiving such support can result in 
a recipient's benefit being reduced by one-third. The experts were concerned that this provision 
discourages family members from providing help and that the policy is confusing to both 
beneficiaries and Social Security staff. 

Another recommendation encompassed by my legislation is the enhancement of work 
incentive provisions. My bill would allow SSI beneficiaries to earn $2400 annually without 
having benefits reduced. For every three dollars earned above this level, benefits will be 
reduced by one dollar. Work incentives provide opportunities for SSI recipients to achieve a 
greater measure of independence and perhaps eventually end the reliance on public assistance. 
In recent years, the disabled in particular have taken greater advantage of the opportunity to 
work. In 1991, 6.3% of recipients with disabilities received income from working. 

The last major change included in H.R. 2676 is the reduction of the age limit for 
eligibility on the basis of age from 65 to 62, phased in over a three year period. The experts 
recommended this reduction to make it consistent with other Social Security programs which 
permit retirement benefits at age 62. This lower age would provide greater security for the 
elderly, for whom it is difficult to find work. 

I recognize that the greatest barrier to enacting the recommendations of the SSI 
Modernization Project panel of experts is the cost. The report noted that the cost of all the 
recommendations over five years would be $38.8 billion, most of which would result from the 
increase in benefits. This is not, however, a reason to ignore the findings of this distinguished 
panel. Justice requires that we provide incomes that permit these persons to live in dignity. We 



217 



can take some consolation from the fact that we are providing help to the aged, blind, and 
disabled, but we are nonetheless keeping them below the poverty level. We can and must do 
better. 

The experts recognized the difficulty posed by the cost of their proposals. They were 
counting on a follow-up commission to examine the financing of this reform effort. 
Unfortunately, the Social Security commissioner under the previous administration never 
appointed a financing commission and the Clinton Administration has only recently nominated 
a replacement. It is my hope that the new commissioner will take up this cause and convene a 
new group of experts to propose a financing mechanism. 

Mr. Chairman, SSI is important to those who are the most vulnerable in our society. It 
is a vital safety net particularly for women and minorities who find themselves without other 
means of support in their old age or because of disability. I urge you to make this hearing a 
first step towards the enactment of SSI reform legislation as recommended by the SSI 
Modernization Project experts. It is time to live up to the promise. 



218 



TESTIMONY OF MS. SYDNEY TALLY HICKEY 

and 

SERGEANT MAJOR MICHAEL F. OUELLETTE, U.S. ARMY, RETIRED 

THE MILITARY COALITION 

Mr. Chairman. The testimony presented today has been prepared by Ms. Sydney Tally Hickey, 
Associate Director of Government Relations, National Military Family Association (NMFA), and 
Retired Army Sergeant Major Michael F. Ouellette, Director of Legislative Affairs, Non 
Commissioned Officers Association of the USA (NCOA). 

NMFA is a volunteer, non profit organization composed of members from the seven uniformed 
services, active duty, retired, reserve and their family members and survivors. NMFA's sole 
focus is the military family and its goals are to influence the development and implementation 
of policies which will improve the lives of those families. 

NCOA is a congressionally-chartered organization with a membership in excess of 160,000 
noncommissioned and petty officers serving in every component of the five (5) Armed Forces 
of the United States; active, national guard, reserve, retired and veterans. 

This testimony has been endorsed by The Military Coalition representing 24 military associations 
with approximately 3.5 million members. A list of the member organizations is enclosed. 



BACKGROUND 

Disabled children of low income military families stationed overseas became eligible for 
Supplemental Security Income (SSI) benefits because of the actions of this subcommittee and the 
passage of the Omnibus Budget Reconciliation Act of 1990. Prior to that time, these families 
and their qualifying children lost their eligibility simply because they were overseas on the orders 
of the U. S. Government. 

Representative Jim Slattery (KS) responded to the plight of a young soldier on orders to Germany 
accompanied by a disabled daughter who qualified for SSI benefits. Rep. Slattery 's legislation 
which permitted the military member with a qualifying disabled child to continue to receive SSI 
benefits while stationed overseas and was adopted by this subcommittee and incorporated into 
OBRA 1990. 

P.L. 103-66 further addressed specific problems facing military families when it extended the 
overseas provision to military families stationed in Puerto Rico or territories or possessions of 
the United States. The law also clarified another provision in the SSI code that had unfairly 
penalized military families. Although military families certainly consider the military member 
to still be a part of the family when he or she was absent on an unaccompanied tour or on orders 
for duty at a distance from the family residence, SSI regulations did not. P.L. 103-66 has 
corrected this inequity. 

CONCERNS 

More recently, a number of other problems have become apparent with the administration of the 
SSI program for military families. One is the inability to determine initial eligibility for SSI 
when stationed outside of the United States. Correction of this problem is addressed in 
legislation (H.R. 480) introduced by Representative Slattery. When a child is born overseas with 
a disability or when a disability is first diagnosed while the family is overseas, the child and the 
family cannot apply for SSI eligibility. The military member must request a humanitarian short 
tour and return to the United States simply to establish a home and have SSI eligibility 
determined. The only other alternative is for the family to attempt to complete their overseas 
tour of duty without the needed economic relief of SSI benefits. Since social workers employed 
by the military and military physicians are available at duty stations outside the United States, 
it would seem reasonable to allow these professionals to make a temporary determination of SSI 
eligibility using criteria and forms required by the Social Security Administration. 

The second problem concerns adult military family members who are eligible for SSI benefits 
within the United States, but not when stationed with their military sponsor outside the United 
States. These adult family members can be the spouse of the military member or, very 
occasionally, the dependent parent of a military member. Each military service has an 
Exceptional Family Member Program (EFMP). All servicemembers with a disabled family 
member are required to register their family with the EFMP. Registered families are screened 



219 



before they are sent to duty stations to ascertain that needed medical and other services are 
available for the disabled family member. This is particularly true for duty stations outside the 
United States where services from the private sector may be limited or non-existent. If the 
required services are not available, either the military member is assigned to another duty station 
where the needed services exist or is assigned outside the United States in an unaccompanied tour 
status. It is obvious that the number of servicemembers with a disabled adult family member, 
a family income low enough to qualify for SSI benefits, and who would be stationed outside the 
United States accompanied by the disabled adult family members would be minuscule. However, 
the importance of SSI benefits to the economic well being of the family is no less for these 
military member than those with disabled children. 



DISCUSSION 

NMFA NCO A and the other member organizations of The Military Coalition are most grateful 
to this subcommittee and Congressman Slattery for their outstanding efforts in rectifying many 
of the inequities military families have had to endure. Nonetheless, we remain amazed that our 
government would ever penalize military families simply because they were following orders! 
As the military services are drawn down in numbers, the abilities and skills of each military 
member becomes even more vitally imp or tant. This Country cannot afford to lose for a day or 
a week or a month a member who is critical to the mission of his/her unit We also do not 
believe the citizens of this Country expect military families to be excluded from the benefits of 
such programs as SSI simply because the services of the military member are needed at a duty 
station outside the United States. 



RECOMMENDA TION 

NMFA and NCO A respectfully recommend that the provisions of H.R. 480 be approved by this 
Subcommittee and that adult disabled dependent family members also be able to qualify for SSI 
benefits when stationed outside the United States with their military sponsor. 
Thank You. 



220 



THE MILITARY COALITION 



Summer 1993 



TMC Coordinator 

c/o The Retired Enlisted Assn. 
909 N. Washington St., Suite 300 
Alexandria, VA 22314 



Mack McKinney 



703-684-1981 
FAX 703-548-4876 



Air Force Association 

1501 Lee Highway 
Arlington. VA 22209-1198 



Doug Oliver x5803 
Kevin Baker x58 11 



703-247-5800 
FAX 703-247-5853 



Air Force Sergeants Assn. 

P.O. Box 50 

Temple Hills, MD 20748-0050 



301-899-3500 
FAX 301-899-8136 



Assn. of Military Surgeons of the US 

9320 Old Georgetown Rd. 
Bethesda, MD 20814-1653 



301-897-8800 
FAX 301-530-5446 



Assn. of the US Army 

2425 Wilson Blvd. 
Arlington, VA 22201 



Erik Johnson x626 
Richard Kaufman x631 



703-841-4300 
FAX 703-525-9039 



Commissioned Officers Assn. of 
the US Public Health Service, Inc. 

1400 Eye St., Suite 725 
Washington, DC 20005-9990 



William Lucca 
Frank Ducheneaux 



202-289-6400 
FAX 202-682-0487 



CW & WO Assn. US Coast Guard 

c/o James Creek Marina 
200 V Street, S.W. 
Washington, DC 20024-3321 



202-554-7753 
FAX 202-484-0641 



Enlisted Assn. of the 
National Guard of the US 

1219 Prince St. 
Alexandria, VA 22314 



703-519-3846 
FAX 703-519-3849 



Fleet Reserve Association 

125 N. West St. 
Alexandria, VA 22314-2754 



Norman Pearson 
Glenn Arnette 
Jim Cross 
Ed Huylebrook 



703-683-1400 
FAX 703-549-6610 



Jewish War Veterans of the USA 

1811 R Street, N.W. 
Washington, DC 20009 



Herb Rosenbleeth 
Mike Cameron 



202-265-6280 
FAX 202-234-5662 



Marine Corps League 

P.O. Box 3070 

Merrifield, VA 22116-3070 



Paul Hastings 



703-207-9588 
FAX 703-207-0047 



Marine Corps Reserve Officers Assn. 
201 N. Washington St.. Suite 206 
Alexandria, VA 22314-2529 

Military Chaplains Assn. of the USA 
P.O. Box 42660 
Washington, DC 20015-0660 



Larry Gaboury 
Roger Rowe 



William Dando 



703-548-7607 
FAX 703-519-8779 



202-574-2423 
717-642-6792 



National Assn. for Uniformed Services Charles Partridge 

5535 Hempstead Way John Morrison 

Springfield, VA 22151-4094 Ruth Tracy (SMW) 

National Guard Assn. of the US Chuck Schreiber 

1 Massachusetts Ave., N.W. Paul Haynes 
Washington, DC 20001 



703-750-1342 
FAX 703-354-4380 



202-789-0031 
FAX 202-682-9358 



National Military Family Assn. 
6000 Stevenson Ave., Suite 304 
Alexandria. VA 22304-3526 



Sydney Hickey 
Dorsey Chescavage 



703-823-6632 
FAX 703-751-4857 



221 



Naval Enlisted Reserve Assn. 

6703 Farragut Ave. 

Falls Church, VA 22042-2189 



Bob Lyman 



703-534-1329 
FAX. 703-534-3617 



Naval Reserve Association 

1619 King St. 

Alexandria. VA 22314-2793 



Philip Smith 
A.E. Rieder 



703-548-5800 
FAX 703-683-3647 



Navy League of the US 

2300 Wilson Blvd. 
Arlington. VA 22201 

Non Commissioned Officers Assn. 

225 N. Washington St. 
Alexandria, VA 22314-2537 



Mike Ouellette 
Larry Rhea 



703-528-1775 
FAX 703-528-2333 



703-549-0311 
FAX 703-549-0245 



Reserve Officers Association 

1 Constitution Ave., N.E. 
Washington. DC 20002-5624 

The Retired Enlisted Assn. 

909 N. Washington St., Suite 300 
Alexandria, VA 22314 



Jud Lively 



202-479-2200 
FAX 202-479-0416 



703-684-1981 
FAX 703-548-4876 



The Retired Officers Assn. 

201 N Washington St. 
Alexandria, VA 22314-2529 



US Army Warrant Officers Assn. 

462 Herndon Pkwy., Suite 207 
Herndon, VA 22070-5235 



Paul Arcari 
Chris Giaimo 
Frank Rohrbough 
Virginia Torsch 

Don Hess 



703-549-2311 
FAX 703-838-8173 



703-742-7727 
FAX 703-742-7728 



USCG Chief Petty Officers Assn. 

5520-G Hempstead Way 
Springfield, VA 22151-4009 



703-941-0395 
FAX 703-941-0397 



222 



NAMI 



TESTIMONY FOR THE HEARING RECORD 

FOR THE SUBCOMMITTEE ON HUMAN RESOURCES 

COMMITTEE ON WAYS AND MEANS 

REGARDING THE SUPPLEMENTAL SECURITY INCOME PROGRAM 

IN CONJUNCTION WITH THE SUBCOMMITTEE'S HEARING 

OCTOBER 14, 1993 

Office of Government Relations 



The National Alliance for the Mentally Ul (NAMI) is a national self-help organization of families of 
persons with severe mental illnesses, i.e. schizophrenia, affective disorders, bipolar disorder, etc. - families 
who, next to the consumers, have suffered the most emotionally and financially through their personal 
involvement and support of a son or a daughter, a sibling or a spouse, or even a parent afflicted with these 
devastating brain diseases - dedicated families who continue as volunteers to achieve NAMTs mission 
to improve the quality of life for all persons with severe mental illnesses and ultimately to eradicate these 
tragic brain diseases. 

NAMTs membership totals over 140,000 persons consisting of families of persons with severe mental 
illnesses, as well as recovering consumers themselves. NAMTs organization consists of a national office 
in Arlington, Virginia: SO state offices; and over 1000 local affiliates. 

NAMI sees the Supplemental Security Income (SSI) program as critically important to the well-being of 
persons with severe mental illness. SSI's income maintenance function and its categorical eligibility 
relationship to Medicaid make it central to government assistance for this vulnerable population. 
Accordingly, the NAMI Board has resolved these principles regarding SSI in our "Policy Platform" 
(ratified in December, 1992). 

"NAMI calls for immediate federal legislation to: 

*"Increase the monthly cash benefit of Supplemental Security Income (SSI), at least to the federal 
poverty level 

•"Increase incentives to work while retaining benefits 

•"Increase the amount of assets an individual may possess to retain eligibility 

'"Eliminate "in-kind" contributions from counting against the income limits 

'"Expedite the appeals process 

'"Coordinate eligibility criteria for Medicaid, Social Security Disability Insurance (SSDI), and SSI 

•" Recruit, train, and monitor representative payees for persons without traditional sources of support 

'"Address the complex problems associated with reaching homeless individuals who are mentally 
Ul 

•"Increase SSI staffing levels and training to accomplish these objectives." 

NAMTs justification for these recommendations, and their correlation to the major chapter topics in the 
Modernization Project's August 1992 "Final Report of the Experts" follow. 

BENEFIT PAYMENT ISSUES - CHAPTER II 

•"Increase the monthly cash benefit of Supplemental Security Income (SSI), at least to the federal 
poverty level" 



223 



NAMI's main concerns are about adult relatives or friends: children, spouses, siblings. It has been more 
important to N AMI families not to have the income stream reduced, suspended or terminated -- without 
an orderly process that can be comprehended and managed by persons whose reason for disability is 
severe mental illness (or their advocates). 

NANA also believes that monthly benefits should continue for at least three months during hospitalizations 
of persons with severe mental illness -- without the currently required written statement from an attending 
physician. In the real world, it is extremely difficult to train the physicians in the legislative/regulatory 
objectives of this requirement, and in its vital importance to the patient's continued stability, post- 
discharge. The consequences of not having the documentation from the physician can be homelessness, 
and re-institutionalization - both of which are more costly to society. 

Persons with severe mental illness can have cognitive deficiencies among their disabling conditions, even 
during stable and productive periods of their lives. Retrospective accounting and the way it affects their 
income stream can be at least unmanageable for them, and at worst harmful. NAMI supports returning 
the program to prospective accounting. 

NEEDS-BASED ISSUES - CHAPTER III 

'"Increase the amount of assets an individual may possess to retain eligibility" 

NAMI's aging parents, especially, are concerned about the needs of their adult children with severe mental 
illness after their own deaths. Policies regarding resources and unearned income should allow properly 
constructed trusts (where the principal is not available as a resource to the beneficiary) and the 
supplemental income they can provide, without having the categorical eligibility for Medicaid be 
extinguished. Additionally, resources accumulated for the "plan for achieving self-support" (PASS) should 
not be counted against eligibility for Medicaid in states using their own rules for determination. 

NAMI also supports the majority recommendations with respect to parent-to-child deeming: use of the 
single formula now employed when parents) have both earned and unearned income; consider income 
intended to replace earned income (unemployment compensation, etc.) as earned income; and deduct 
itemized expenses incurred because of the child's disabling condition before deeming of parents' income. 

'"Eliminate "in-kind" contributions from counting against the income limits" 

NAMI understands that exempting food, clothing, or shelter furnished to persons with severe mental illness 
by not-for-profit community organizations is a benefit to the individuals. But, when setting policy for in- 
kind support & maintenance, NAMI strongly believes that since the current $97.38/week is clearly 
insufficient to sustain independence, taking $32.13 of it away because the same in-kind contribution was 
made by family is counterproductive. There are even instances in which the "family" is an elderly widow 
who likely needs the additional third of the benefit to meet the family shelter expenses. At the very least, 
pro rata contribution to household expenses should become a rebuttable presumption. 

DISABILITY & WORK INCENTIVES - CHAPTER IV 

'"Increase incentives to work while retaining benefits" 

Persons with severe mental illness rely almost exclusively on Medicaid in many instances - for costly 
prescribed medications that maintain their stability and prevent their institutionalization, or reinstitutionali- 
zation. Loss of access to these medications can produce catastrophe for persons with severe mental illness. 

Accordingly, with respect to work incentives, NAMI recommends alterations in the interaction of 
"substantial gainful activity" with eligibility for the SSI program, and the Section 1619 - a and b 
provisions for maintaining Medicaid coverage as earnings rise. 

'"Expedite the appeals process" 

NAMI advocates for a population whose disability is not always or uniformly apparent Furthermore, the 
individuals applying often lack the very organizational skills and access to documents that would make 
them more successful applicants. Professional evidence and family or advocate assistance is very 
frequently necessary. 



224 



In the Modernization Panel's discussion of the definition of disability, relative to the "substantial gainful 
activity" test, panelists almost unanimously recommend that the dollar amount alone is not a reasonable 
determinant. If the generation of S500/month in earned income by a given beneficiary requires substantial 
support services, this in itself is ample demonstration of this beneficiary's disability. NAM! agrees that 
the definition should be so understood. 

With respect to disability determinations for children. NAMI applauds the actions taken by SS A following 
Zebley, but agrees there is still a need for disability criteria that would more easily permit assumed 
disability - and therefore Medicaid coverage - for very young children. Payments should not be limited 
to the six months currently allowed for "presumptive payments", but the existing provision not considering 
them as overpayments should also be extended. 

NAMI also agrees that time limits should be set for decisions on eligibility and appeals. Failure to meet 
these should be linked to non-recoverable payments to applicants. 

Finally, NAMI strongly concurs with the requirement for a face-to-face interview preceding denial, and 
the correlative need for staff specially trained to deal with persons whose primary cause of disability is 
severe mental illness. 



AGENCY SERVICE ISSUES ■ CHAPTER VI 

•"Recruit, train, and monitor representative payees for persons without traditional sources of 
support" 

Another outgrowth of NAMTs concern for adults whose family predeceases them is the matter of 
trustworthy, accountable representative payment system for persons whose disability keeps them from 
adequately managing their own finances. Proper Protection & Advocacy procedures must be maintained 
while a person is being determined incapable of handling his/her own resources. 

•" Address the complex problems «««nri«fH with reaching homeless individuals who are mentally 
ill" 

When persons with severe mental illness lose their access to treatment, for whatever reason, they often 
become homeless. NAMI is supportive of suggestions that procedures be put in place to meet the needs 
peculiar to this population: pay benefits while they're in public shelters; establish alternate permanent 
addresses for their payments, use trained staff and expedited procedures to register them without all 
required documentation, etc. 

'"Increase SSI staffing levels and training to accomplish these objectives.'' 

In the debate on staffing issues, NAMI supports the addition of at least 6,000 staff members to SSA's 
program of Supplemental Security Income. The Social Security Administration is to be commended for 
the humane and forward-looking programs it now has in place. The letters of agreement into which local 
SSA offices can enter with psychiatric inpatient institutions is one such example. This program can 
prevent rapid relapse of persons with severe mental illness upon discharge from an inpatient stay by 
having an income stream and Medicaid coverage already in place. But it can only work if sufficient 
numbers of staff are available and trained. 

The out-going Commissioner testified before a Ways & Means Subcommittee that 5,000 more slots would 
do the job. NAMI believes that with the other reforms we've supported here: face-to-face hearings, 
specially trained workers available at all area offices, and sufficient staff to make the hospital discharge 
letters of agreement really work - at least the full 6.000 additional FTE's are necessary. 

LINKAGE OF SSI TO MEDICAID - CHAPTER VII 

•" Coordinate eligibility criteria for Medicaid, Social Security Disability Insurance (SSDI), and SSI" 

NAMI's positions on this principle are partly included in the recommendations on Chapter IV. The 
objective is of course to avoid "notches" in initial or continuing eligibility where these programs intersect 



225 



Uniform eligibility criteria would build confidence among beneficiaries that, despite benefit dollar re- 
ductions because of increased earnings, the point at which all benefits would terminate would not be 
different for each program and thereby more incomprehensible. 

NAMI also recommends making categorical eligibility for Medicaid national, so that persons with mental 
illness who move from state to state can retain the opportunity to reconnect with treatment, irrespective 
of in what state they happen to find themselves. 

NAMI shares the hopes of SSA and the Modernization Panel that many of the recommendations can be 
turned into reality in the near future by actions of the Congress and the Administration. 

POOLED TRUSTS 

* Issue has gained relevance since Modernization comments 

In addition to the organizational positions taken above in connection with the modernization project, 
NAMI urges the Subcommittee to accept the recommendations regarding codification of the Social 
Security Administration policy on trusts, modified to track the action taken by Congress in P. L. 103-66, 
OBRA, '93. Oral testimony on these points was presented by other witnesses - principally the ARC. 

Medicaid amendments in this Act exempt from adverse effect on Medicaid eligibility of the grantors 
transfers by a parent to a trust for the benefit of a disabled child, of any age; and transfers to a trust for 
a disabled person under age 65 - including a pooled trust. It is presumed that the eligibility of the trust 
beneficiary will be treated as under current SSI policy: only direct payments from the trust to the 
individual can affect benefits or eligibility. Upon the individual beneficiary's death, the amount recovered 
from pooled trusts by state Medicaid may be limited "subject to any agreed upon amount or percentage 
of remaining funds which must be paid to the general pooled trust funds, as determined by the trust 
agreement". 

NAMI believes with the ARC that codification will allow parents, family members, and friends to rely 
more securely on the rules for making arrangements, which will last long after the parent (or other grantor) 
is no longer living, to benefit the disabled individual who needs on-going assistance - without 
jeopardizing their SSI or Medicaid eligibility. 



National Alliance for the Mentally III 

2101 Wilson Boulevard, Sum 302 • Arunoton, VA 22201 
703-524-7600 • pax 703-524-9094 



226 



TESTIMONY BY ROBERT BURGESS 
NATIONAL ASSOCIATION OF DISABILITY EXAMINERS 

The National Association of Disability Examiners (NADE) appreciate 
this opportunity to offer our views on issues affecting the 
Supplemental Security Income program. 

NADE is a professional association whose membership includes 
individuals engaged in all aspects of the Social Security and 
Supplemental Security Income disability programs. Although the 
majority of our members are employed in the DDSs, our membership also 
includes physicians, attorneys, advocates, rehabilitation counselors 
and others interested and involved in disability evaluation. The 
diversity of our membership provides us with a unique perspective; an 
ability to view problems and proposed solutions both from a practical, 
"hands on" standpoint and also as they affect the applicant and the 
disability program itself. 

(1) RECOMMENDATIONS MADE BY THE SSI MODERNIZATION PANEL 

The SSI Modernization Panel offered a number of recommendations 
to improve the SSI program. Many of those involved the disability 
program, including a recommendation to review the definition of 
disability itself and several recommendations to revise the evaluation 
process. We would like to comment on those recommendations. 

RESOURCES 

We strongly agree with the panel members and other experts who 
expressed the view that "...the real problem was the budget-driven 
under funding of agency operations. . .without added resources, lasting 
improvements are not possible no matter how much effort is directed 
toward altering administrative processes or reassigning priorities 
which, in turn, can only reduce backlogs at the expense of other 
program "necessities". 

DEFINITION OF DISABILITY 

NADE recognizes the need to remove beneficiaries from the rolls 
by virtue of return to work and supports efforts aimed at 
rehabilitation. However, we agree that individuals who are able to 
work only by virtue of substantial support services are not performing 
"substantial gainful activity" and are still disabled. It is 
appropriate to change the definition of "substantial gainful activity" 
to recognize this. We do not, at this time, recommend changing the 
definition of disability itself. 

APPEALS 

NADE can not support elimination of the reconsideration level of 
appeal. To do so would negatively affect the DDSs, many of whom have 
specialized recon units; the ALJs, by increasing their workload; and 
the thousands of applicants whose claims are allowed at this level. 
We have long supported strengthening this step rather than eliminating 
it. The current reversal rate at this level is not insignificant. 
However, enhancement of the reconsideration process could increase the 
reversal rate and reduce the burden at the Administrative Law Judge 
level. We would support providing a face-to-face evidentiary hearing 
at the reconsideration level coupled with providing increased 
discretion to the decision maker. To offer this hearing at the 
initial level would be cost prohibitive and counterproductive and any 
face-to-face interviews held without additional discretion given to 
the DDS decision-maker will have little effect on the outcome of the 
decision and will add substantial cost and time to the process. 

TIME LIMITS ON DISABILITY CLAIMS AND APPEALS 

NADE strongly opposes establishment of arbitrary time limits for 
completing SSI cases under appeal and for making initial 
determinations on new disability claims. As we have stated in past 
testimonies, such a requirement could encourage claimants to not 
cooperate in the documentation of their claim. they would have no 
incentive to keep scheduled consultative examinations or provide the 
agency with the information necessary to document their claims. 



227 



Additionally, it is highly likely that the majority of these cases in 
which benefits were begun prior to making a final determination would 
ultimately be denied. Denials, in general, require more documentation 
and therefore, more time. An allowance can be made as soon as the 
decision has been documented, whether or not all information has been 
obtained, whereas under current provisions we must wait until all 
documentation has been received before processing a denial. Timely 
decisions are important but program integrity demands that those 
decisions also be accurate and well documented and not based on an 
arbitrary time frame. 

OUTREACH ACTIVITIES 

NADE agrees with the views expressed by the SSI Modernization 
Panel and other experts that SSI Outreach Activities must be 
appropriately funded. Those most in need of outreach to provide 
access to the SSI program are often those with the fewest resources. 

Because of this, without adequate funding "successful" outreach 
results in unmanageably high backlogs and unacceptably long delays in 
development and adjudication. Years of "downsizing", combined with 
increasing workloads have hampered effective implementation of 
outreach activities. Applicants receive less assistance in processing 
their claims; DDSs are not able to educate medical sources about the 
need for information or are unable to recruit consultants willing to 
see claimants with unresponsive or no sources. Medical sources are 
reluctant to provide information when they are not familiar with the 
needs and requirements of the program. Adequate funding is essential 
if outreach activities are to be truly beneficial to those they are 
intended to help. 

(2) THE EFFECT OF THE SUPREME COURT'S DECISION IN SULLIVAN V. ZEBLEY 

NADE members share many of the concerns expressed by educators 
and others that providing SSI payments to children may, in some cases, 
cause harm. We, too, are aware of anecdotal evidence that suggests 
children are not benefiting from these funds. While we cannot comment 
on the validity of these at this time we do not believe they should be 
discounted as "myths". We do know that these claims have had a 
significant impact on the disability process. Not only have 
applications increased dramatically, these claims almost always 
require more documentation than most adult claims and from a wider 
variety of sources, many of whom are not familiar with the SSI program 
or who, for whatever, reason, are unwilling to provide information. 
We are concerned with the extent to which "allowance rates" have been 
used as a measure of a state's compliance with the regulations despite 
the fact that previous studies have shown that allowance rates are not 
a reliable measure of accuracy. To require states with "low" 
allowance rates to re-adjudicate all denials (and to do this only on 
childhood claims) is to foster the perception that the only "correct" 
decision is an allowance and that children's claims should be 
evaluated more liberally than adult claims. 

While we do not disagree with the Zebley decision itself we are 
concerned that it be implemented appropriately in a way that does not 
disadvantage children. We are encouraged by the recent initiatives of 
impartial parties such as the Office of Inspector General and the 
General Accounting Office to review this program -- it's 
implementation and impact. 

(3) ELIGIBILITY REQUIREMENTS FOR IMMIGRANTS AND SUBSTANCE ABUSERS 

Substance abuse has been widely accepted in the medical community 
as a illness which can lead to a disabling condition. However, here 
too, NADE members are aware of widespread anecdotal evidence that 
suggests payments are harming, rather than helping, beneficiaries. 
The Regulations do require appointment of a representative payee and 
referral for treatment (and compliance with that treatment). 
Unfortunately funding and staffing shortages have limited SSA's 
ability to monitor both the effectiveness of the representative payee 
and the beneficiary's compliance with treatment. this monitoring is 
essential and must be appropriately funded if program integrity is to 
be maintained. 

Thank you for the opportunity to offer these comments for your 
consideration as Congress studies the complex issues facing the 
disability program today. 



228 



HOWREY & SIMON Auorneysa.Uw 

1299 Pennsylvania Ave, N.W. 
Washington, O.C. 20004-2402 
12021 783-0800 
FAX 12021 3B3-6610 

^ >. v. «... . ao» David C. Murchoon 

October 28, 1993 12021383-6938 



The Honorable Harold Ford 

Chairman, Subcommittee on Hunan Resources 

Committee on Ways and Means 

United States House of Representatives 

B-317 Rayburn House Office Building 

Washington, DC 20515 

Re: Oversight Hearing on Supplemental 
Security Income 

Dear Mr. Chairman: 

National Selected Morticians ("NSM") , a national trade 
association of some 950 funeral firms located throughout the 
United States and in various foreign countries, submits this 
letter for the record in the above hearing. NSM maintains its 
headquarters offices at 5 Revere Drive, Northbrook, Illinois 
60602. 

The present SSI system provides that irrevocable funds 
for funeral and related expenses are not to be treated as 
resources in determining benefits. In addition, the SSI program 
currently allows a $1,500 burial fund and a burial space 
exclusion for revocable arrangements. Interest and accruals on 
burial space and a burial fund are also excluded. These 
exclusions have worked well in practice and are manifestly in the 
public interest in making possible a dignified funeral and burial 
for elderly and disabled individuals who are without resources at 
the time of death. 

Most of NSM's members make available to consumers pre- 
funded arrangements under which funeral goods and services are 
later furnished at the time of death. Currently, these 
arrangements are funded in a variety of ways, including trusts 
and insurance. Regardless of the financing instrument, SSI 
resource exclusions apply. NSM believes that all present 
resource exclusions for funeral and burial funds should be 
retained. 

In the case of consumers without adequate resources, 
unless such prepaid arrangements have been made prior to death, 
funeral expenses are generally borne by state or local 
authorities. There can be little question that, if the current 
SSI resource exclusions for funeral and burial funds are 



229 
HOWR6Y& SIMON 



Honorable Harold Ford 

October 28, 1993 

Page 2 



eliminated, state and local expenditures for indigent funerals 
will of necessity increase enormously — to the great detriment 
not only of state and local governments but to thousands of aging 
poor who would be relegated to a form of potters' field treatment 
not of their choosing. Thus, in our view, this result cannot be 
justified by the perceived necessity of "streamlining" of 
resource exclusions. The idea that these exclusions should be 
eliminated in the name of simplification, without compelling 
factual evidence that their administration has become unworkable, 
is a fallacious one and should be recognized as such. Indeed, if 
the proposed deletion of these exclusions should become a 
reality, the new administrative task of valuing assets previously 
excluded alone would probably be as burdensome and expensive. 

We are especially concerned by the suggestion in the 
Panel's report that the proposed increases in resource limits 
will be enough to permit recipients of excluded resources to keep 
them. As we see it, this is a major flaw in the report and would 
appear to ignore compelling evidence to the contrary. As reported 
by reliable statistical sources, the average cost of a funeral 
and in-ground burial is about $5,000. A cemetery lot and marker 
add a still further amount. It thus is difficult to imagine 
that, as a practical matter, the new resource limits will 
counterbalance the elimination of these exclusions. 

We are also puzzled, as the Subcommittee must be, that 
the report apparently considers it in the public interest to deny 
aging poor of the fruits of earlier prudent pre-planning of the 
funeral arrangements they prefer and, instead, to penalize them 
for it. The typical SSI recipient, like everyone else, wishes to 
have a funeral and final disposition of his/her persuasion and 
choice. By removing the exclusions, this important part of an 
individual's life would be effectively removed. As Chairman 
Flemming said in his letter transmitting the report, "I am struck 
by the fact that this nation does not have a well-coordinated 
policy for poor persons as individuals." The removal of the 
exclusions in question would certainly compound that policy 
failure. 

Further, we note that tens of thousands of SSI 
recipients currently have pre-funded arrangements. If the 
exclusions are eliminated, the impact on these recipients will be 
catastrophic. The probability is that thousands of them will be 
disqualified and immediately forced onto local welfare roles. 
This impairment of the safety net would hardly seem in the 
national interest. 

The report's recommendation that an overall increase in 
allowable resources will offset or cure the loss of the exclusion 



230 

HOWRGY& SIMON 



Honorable Harold Ford 

October 28, 1993 

Page 3 



in question is unsound, if not totally incorrect, for the reasons 
already noted. A further consideration is that, in all 
likelihood, the increase recommended would be quickly depleted by 
impoverished recipients desiring more of perceived day-to-day 
necessities, without consideration by most of them of the 
expenses needed later at the time of death. In today's economic 
climate, this result is one to be expected and would be entirely 
understandable. That is why designated exclusions, such as the 
present allowance for a burial fund and burial space, are more 
effective as a practical matter than a general increase in 
resources. The present exclusions were crafted in a similar 
factual setting by Congress in 1982 for the very purpose of 
allowing SSI recipients to provide for final expenses through 
prepaid funeral contracts without forfeiting the right to receive 
benefits. To abandon this approach — as the report seeks — 
would seem directly contrary to the policy of Congress to support 
the aging poor in a prudent and reasonable manner. The Congress 
was correct in its 1982 analysis in this regard, and it should 
stay the course now by rejecting the Modernization Panel's 
recommendation to eliminate the exclusion of funds set aside for 
funerals and burials. 

Finally, we support and agree with the comments of 
representatives of the National Funeral Directors Association who 
appeared and testified before the Subcommittee on October 14, 
1993, and we specifically incorporate by reference the statement 
made by Mr. Larry K. McElwain on behalf of that Association. 



Respectfully submitted, 
1/a 



ai^L^f. ^Liz 



Fred L. Bates 

Executive Director 

National Selected Morticians 



*iw_tai 



U A f^ini 



David C. Murchison 
Legal Counsel 



231 



OVERSIGHT HEARING ON SUPPLEMENTAL SECURITY INCOME 

STATEMENT OF: 

New Jersey State Funeral Directors Association, Inc. 

PREPARED FOR: 

Subcommittee on Human Resources 

Committee on Ways and Means 

United States House of Representatives 

October 21, 1993 

SUMMARY OF COMMENTS: 

Advocating the retention of specific resource exclusions for prepaid funerals and burials. 

Introduction 

These comments are filed in response to the solicitation for comments by the 
Subcommittee on Human Resources, Committee of Ways and Means, U.S. House of 
Representatives, which conducted an oversight hearing on October 14, 1993. 

The comments specifically address the Supplemental Security Income (SSI) 
Modernization Project Final Report by the Experts published by the Social Security 
Administration (SSA) in the Federal Register on September 4, 1992 (57 FR 40732). 

The New Jersey State Funeral Directors Association (NJSFDA) is a non-profit, 501(c)(6), 
state-wide professional and business association of 757 funeral directors. All of the 
members of the New Jersey State Funeral Directors Association are also members of the 
National Funeral Directors Association, which has also filed comments. 

The New Jersey State Funeral Directors Association entirely concurs and supports the 
conclusions and the recommendations of the National Funeral Directors Association, 
which generally focus on the need to retain the specific resource exclusion for prepaid 
funerals and burials . The following comments are designed to complement those remarks 
and provide some state-level perspective on the issues with which we are concerned. 



Who Will Bury the Dead? 

We note that the final report of SSI Modernization Project did not address the question of 
societal responsibility for caring for the dead, except to the extent that we can presume 
that the proposed single lump sum cash resource exclusion of $7,000 ($12,000 for a 
couple) was intended to do so. It is our belief that this approach will not deal with this 
"forgotten need" as adequately and effectively as the presently defined and specific 
funeral resource exclusion already does . 

Accordingly, we wish to express here our very deep concern, that in the consideration of 
the overwhelming demands by the living on the SSA, and on the SSI program they are 
charged with responsibility for administering, the need to humanely and realistically deal 
with the responsibility for the dead has been forgotten. The Final Report did not in one 
place address this issue except to say that previously identified resource exclusions would 
be eliminated in favor of a "simplified" methodology. 

Unfortunately, death and its attendant needs, like human service programs generally, does 
not lend itself to simplification. It was the recognition of this human fact that led to the 



232 



creation of the funeral and burial resource exclusion in the first place, when the Social 
Security Act was amended as part of the Tax Equity and Fiscal Responsibility Act 
(TEFRA) of 1982. 

Why Was the Funeral and Burial Resource Exclusion Created? 

As so aptly summarized by the SSA in its SSI Program Circular of February 3, 1988, "It 
was the judgment of Congress that persons should not have to choose between lifesaving 
welfare assistance and giving up their plan for the disposition of their bodily remains." 

Congress enacted the 1982 TEFRA amendment after a well publicized case in which a 
Virginia woman was denied SSI eligibility because of the existence of a burial plot in a 
cemetery. 

Clearly, the absence of a resource exclusion for prepaid funeral and burials was 
recognized as a significant policy omission that needed addressing, and that providing for 
same was an important priority of both the Congress and the SSA. 

Even prior to TEFRA enactment on September 3, 1982, SSA issued an interim rule in the 
August 17, 1982 Federal Register (47 FR 35948), recognizing that "burial plots or 
prepaid (that is, fully paid or currently being paid) burial contracts ... will not realistically 
be used by an SSI applicant or recipient to meet his or her current subsistence needs. We 
have found this to be true because most persons who make arrangements for their burial 
often will not change such arrangements under any circumstances. (47 FR 35948) 

An additional interim rule followed in the December 8, 1982 Federal Register (47 FR 
55212), after the TEFRA position was actually enacted, with the initial final rule being 
published on December 28. 1983 (48 FR 57125). 

This resource exclusion was not created by advocates of funeral service, but rather was 
generated as an administrative response to an acute and human problem. The recognition 
of the legitimacy of, and necessity for, this exclusion has increased dramatically since 
1982, as has the general public awareness of the demographics of aging and the growth of 
the SSI and Medicaid programs. 

The Impact of Funeral and Burial Exclusions at the State Level 

Public assistance payments for funerals and burials at the state and local level have 
always been on the edge of crisis, with this crisis intensifying since the mid 1980's in 
response to an acceleration both of need, caused by the growth of Medicaid eligible 
individuals (based on SSI eligibility standards) and the increased mortality rates among 
public aid recipients due to Acquired Immune Deficiency Syndrome (AIDS), 
Tuberculosis (TB) and other disease phenomena, and of price. As an example, in the 
State of New jersey, where the state generally provides more adequate funeral payment 
assistance than most states, the current allowance pays only 53% of the actual retail costs 
of a "minimum" funeral, and only 43% of the related cemetery costs. (New Jersey State 
Funeral Directors Association, private study, August 1992). But increasingly. New 
Jersey (as an example) has disallowed funeral assistance eligibility for derivatives of the 
basic Medicaid program on the basis that the out of pocket cash requirements simply 
could not be supported by the state budget. 

As a result, in seeking to address the long term needs of funeral and burial payments, the 
states, funeral directors, elder care advocates, hospice groups, social workers, nursing 
homes - the whole community that is responsible for the practical reality and demands of 
death - has been advocating and educating the need to engage in reasonable financial 
planning through the establishment of prepaid funeral and burial accounts, because of the 
certainty that state cash payment assistance programs are financially inadequate and cover 
a declining percentage of the total public assistance community. 

It is essential to recognize that the SSI eligibility standards that today provide for a 
prepaid funeral and cemetery exclusion, in and of themselves, and as they apply as the 
state eligibility standards for Medicaid, are the only adequate mechanism that exists in the 
United States today to practically and feasibly deal with aggregating, labeling and 
segregating out financial resources to bury the dead who were recipients of public 
assistance. 

The elimination of this resource exc lusion, the failure to separately provide for this 
purpose that was recognized in 1982 as a compelling and special need, will result in a 
disheartening and inhum ane indifference to the care and disposition of the bodily remains 
of our financially unfortunate citizens. 



233 



A Resource Exclusion with a Purpose 

We expect part of the interest in resource simplification is to eliminate the potential for 
resource exclusion abuse. Accordingly, the experts expressed an indifference to 
distinctions between accessible and inaccessible assets. 

However, in doing this it seems that a more valuable distinction may be had from 
examining the purpose for which the resource exchange or change in accessibility 
occurred; e.g., a resource exchange (or trust to effect same) to provide a reversionary 
interest in a future funeral and burial, the purpose of which is agreed to be a useful public 
policy purpose, would be allowed, whereas an irrevocable exchange merely for the 
purposes of SSI eligibility would not be. 

This is a more meaningful approach to this problem than today's current SSI policy where 
a resource transfer outside of two years prior to eligibility is not considered, thus 
permitting the types of abusive estate planning that has been a chronic concern of SSA. 

We argue then, that SSA policy should support resource exclusion by purpose, and avoid 
generalizations of dollar amounts ($7,000 for an individual, $12,000 for a couple) as 
being intended to cover all needs. We agree that it probably makes some sense to 
generally increase the personal allowance set asides, but it cannot be thought that these 
amounts will adequately provide for funeral expenses. This is particularly so because of 
the fixed character of the dollar exclusions, and the ever changing prices of consumer 
goods and services such as funerals and burials. 

The current policy on prepaid funerals and burials is working -- whether funded by the 
use of life insurance or trusts - and should be retained in this fashion. There is no 
evidence of abuse. The original regulations prescribed no limit and set no parameters 
(except on revocable trusts) or terms and conditions, although the Secretary (of SSA) has 
the authority to do so. The Secretary, in the ten years of the program, has not apparently 
seen the need. 



The Program that Took Ten Years to Implement 

The SSI (and Medicaid) funeral and burial resource exclusion program has taken a full 
decade to implement, and we consider that the full understanding of the program by all 
levels involved in program administration, did not really occur until 1992. 

Ten years .... ten years for a good idea to achieve reality. Ten years for the basic rules to 
filter down from the SSA to its own staff; to the state Medicaid policy writers and hence 
to the eligibility case workers; to the social service staffs of nursing homes, hospitals, 
hospice, funeral homes. Ten years to determine if what the Congress and the SSA really 
intended is what was being implemented on the regional and local level. 

The SSI and Medicaid programs are massive, in terms of staff, dollars and eligible 
recipients. We recognize the inherent responsibility to improve, review and constantly 
rework such a program in its broadest respects. 

But we wish it understood that this small pan of this huge program -- the funeral and 
burial resource exclusion ~ which imposes no out of pocket cash costs on the state or 
federal governments -- has been successful, finally, at a not insignificant cost of labor and 
effort to implement it. 

To change it now would undo a significant amount of good, and would provide no 
solution for the future burial of the SSI and Medicaid dead. 



Conclusion 

Our greatest concern is that the need of caring for the dead is being overlooked and 
forgotten, and that absolutely no consideration has even been given to it in the rush to 
broadly redefine the methods of administering resource exclusions. 

If we achieve the recognition of the need to deal with the practical funeral and social 
requirements of death, then a practical assessment in our view would keep intact the 
present funeral and burial resource exclusions for all of the reasons that they were 
developed in the first place in 1982. 



234 



In the intervening ten years since Congress and the SSA adopted the funeral and burial 
resource exclusions, nothing has changed, except that now - through the SSI eligibility 
standards -- we have a working solution to a real need. 

The program of funeral and burial resource exclusions works. 

We respectfully advocate its retention as is. 



235 



SARAH B. PATTERSON 
ATTORNEY • AT ■ LAW 

Proct.ce limited to Social Security and SSI Cases 
July 25, 1993 



Fifth Floor 

44 Montgomery Street 

San Francisco. CA 94104 



Hon Harold E Ford 

Chairman, Subcommittee on Ways and Means 

U S House of Representatives 

1 102 Longworth House Office Building 

Washington, DC 20515 

Dear Representative Ford: 

1 am writing to submit a statement for inclusion in the record of the hearing you are going to hold 
on the SSI program My remarks are limited to the topic of SSI benefits for substance abusers 

I have been practicing law for 1 7 years, and my practice is limited to representing claimants in 
Social Security disability and SSI cases I practiced for many years in Louisville, K.Y, and three 
years ago opened a practice in San Francisco The difference in my practice here is dramatic 
The cases in San Francisco (and this seems to be the experience of most attorneys here as well as 
the experience of the SSA district offices) is that the vast majority of the cases are drug and 
alcohol disabilities, many of them from our vast homeless population My conversations with 
other lawyers around the country indicate that this is growing in all major cities In California, at 
least, these claimants are often people who, in another era, would have been in mental hospitals 
due to serious psychiatric disorders 

I believe the current Social Security regulations are adequate in addressing substance abuse. The 
cases I have here are most frequently claimants who are "dual diagnosed," meaning they are both 
mentally ill and have substance abuse issues Often, especially here where mental health services 
for the poor are virtually nonexistent, these mentally-ill people are self medicating with street 
drugs and /or alcohol My clients report they cannot be seen for mental heath treatment unless 
they are actively suicidal The health care systems are simply overwhelmed, and further draconian 
budget cuts are in store 

The streets in our Tenderloin neighborhood remind me of the bar in Star Wars I ask myself 
what has become of us, that Mother Teresa is sending missionary nuns from Calcutta to work in 
the Tenderloin in San Francisco 

To me, the problem is not that we are giving money to addicts or alcoholics As a taxpayer, I am 

Licensed in the Commonwealth ot Kentucky Admitted lo .he Northern District ot Calltornio Federal Di I. 



Telephone (415) 955-2656 



236 



as reluctant as anyone to think of my tax dollars going to buy vodka or crack. If the system 
would work the way it is designed to, the recipients of benefits would all have responsible payees, 
and they would all as a consequence have housing because their payees would see to that And 
they would all be in decent treatment 

Restricting addiction disabilities will only push the problem to another segment of the overloaded 
system Jails in California feel the brunt of the "deinstitutuionalization" of the mentally ill The 
Social Security system is feeling it as well The population bulge of 40-50 year old people is 
hitting Social Security as they begin physical and mental deterioration, often accelerated by 
substance abuse Young people can drink a quart of vodka a day, but when you are 45 and have 
been doing it for 20 years, the body and the brain give out In some cases it induces mental 
illness and organic brain damage, or the mental illness induces the drug addiction . The end result 
is the same 

Substance abuse treatment is the hearth care issue of the 90's Social Security has an opportunity 
to have some positive impact on this problem by making certain that qualified recipients of 
disability benefits receive adequate mental health care for substance abuse problems This is not 
a"quality of life" issue, - to use a phrase common to insurance companies denying mental health 
coverage This is an issue that affects the quality of life in our cities, and the health of the cities 
themselves Solving the drug problem is on the agenda of many agencies and administrations, and 
this is but one face of the problem. 

The American Medical Association did not recognize alcoholism as a disease until the mid - 
1950's It took 40 years for Social Security to catch up by placing substance abuse in its Listings 
of Impairments. Certainly there are misuses of this category of disability, as there may be of 
others That is what the system is designed to catch, and it catches and discards hundreds of 
thousands of them. Some cases, however, are deemed severe enough for disability benefits 

Requirements for treatment in such cases are essential In my experience the treatment is not 
available, and the monitoring is not in place. The answer to this is to fund the treatment and 
the monitoring. It is not to deny benefits to people with a severe and uncontrolled mental illness 
It is almost inevitable that a backlash will be created by those who don't understand the nature of 
addiction. The nature of addiction is the loss of choice about use of substances People can 
recover, but it is a slow and painstaking process that some people cannot endure 

I encourage all my clients to get into recovery programs I see some of them months later- some 
of the ones for whom it has worked. Their SSI money has gone to pay for residential care and 
halfway houses When it works, it is a miracle and beautiful to behold I have a fifty-year old 
client in a treatment house who is learning to read for the first time Some of them stop drinking 



237 



only to have even more serious psychiatric problems surface If treatment is not in place for these 
illnesses, their sobriety is simply history. 

Addicts are human beings in incredible pain As a society we cannot be in a position of treating 
them like animals who do not even deserve housing or simple health care No one chooses to 
turn six $10 tricks a day to support a coke habit if they have any choice This is not a criminal, 
this is a sick person. No one lives in alleys and bushes, or sleeps in doorways in ragged blankets 
and panhandles for food if they have the choices that you and 1 have But addiction affects many 
families, even those like yours and mine It kills It maims It destroys lives as surely as any 
physical disease, but generates little of the compassion we reserve for physical illness 

The vision of the system is to provide monitoring and treatment for the most severely mentally ill 
of our street people Let us not condemn the parts of the system that are identifying people in 
need of monitoring and substance abuse treatment Let us rather work harder to get the rest of 
the treatment design into play, to provide more and better payee services, more and better 
treatment facilities and more careful monitoring with continuation of benefits contingent on 
participation in treatment. 



Respectfully, 




Sarah B Patterson 
Attorney at Law 



238 



WAYS AND MEANS COMMITTEE 

U.S. HOUSE OF REPRESENTATIVES 

1102 LONGWORTH H.O.B. 

WASHINGTON, D.C. 20515 

OCTOBER 22, 1993 



My name is Stephanie Shelton. My address is 2502 Win- 
tergreen Avenue Forestville, Maryland 20747. My phone number is 
(301) 736-6364. I am a twenty-six-year-old woman. I am writing 
the Committee for Ways and Means because it is necessary for me 
to explain the difficult situation I have been dealing with for a 
long period of time. I would appreciate your time and considera- 
tion in this matter. 

I was diagnosed at the age of eight with mild mental retar- 
dation. Ever since that time, I have been living with a 
relative; presently with my maternal grandmother. My present 
goals include leading a fairly independent life without having to 
rely on my family for everything and I would like to get a better 
paying job. However, serious obstacles prevent me from reaching 
these goals. 

In September, 1991, I went to the Camp Springs Social 
Security office to apply for Supplemental Security Income (SSI). 
This was the first time I had ever attempted to receive assis- 
tance from the government. One of the employees at the office 
seemed very optimistic about my situation. She said that I had a 
very good chance of receiving SSI, given my circumstances. Un- 
fortunately, such optimism and high expectations did not produce 
any results. I was rejected from receiving SSI. Then, I was 
told that I could reapply. 

Four to five months later, I applied again and was rejected 
for a second time. The letter I received explained that, since I 
had worked for five years at Hardee's fast food restaurant, I 
showed a capacity to work and support myself. May I ask how I 
can support herself with $100.00 a week? I do not think I could 
pay rent, let alone food, medication, doctors' appointments, and 
clothing expenses with that amount of money. So, I asked for a 
hearing in January or February, 1993. I have not received a 
response from the Social Security office for approximately eight 
to nine months. I have made two calls within that time frame, 
but nothing resulted from those inguiries. At this point, my 
goals will not be reached, given the indifference of the Social 
Security Administration. 

Presently, I am working at Roy Roger's fast food restaurant 
in Edgewater, Maryland. After taxes, I bring in approximately 
$128.00 a week. I earn $4.30 per hour (minimum wage). In the 
last few years, I have been living with my 73 year old maternal 
grandmother, who can barely make it on her own. Neither one of 
us owns a vehicle and our total resources are meager. 



239 



For the two years I have attempted to receive SSI 
(September, 1991 to present). Regretably, I have only been work- 
ing ten out of those twenty-four months. In May, 1992, I finally 
was hired at "Hot Dogs and More" up the street from where I live. 
The owner decided not to hire me back after five months of work- 
ing there. They had remodeled the restaurant, telling each one 
of us to reapply once the restaurant was finished being 
remodeled. I did just that, with no response from the owner; not 
a letter or phone call. From October, 1992 to July, 1993, I was 
jobless again. Without transportation, I walked to every fast 
food and convenience store nearby, applying for jobs, with no 
success. Unfortunately, I have not been able to be a cashier be- 
cause counting money is difficult for me. Therefore, options as 
to what I can do in a fast food restaurant are minimal. So, too, 
the possibility of making more money is slim to none. 

I am still waiting for a response from the Social Security 
office to which I applied for a hearing and I am trying my best 
to make due with the scarce resources available to me. I have 
many concerns at the moment. Not only do I fear losing my 
grandmother in the future, I am afraid of what will happen to me 
if my grandmother is not around in the future. I am certainly in 
a "Catch 22" situation with little hope for a brighter future. 

On October 18, 1993, I received more discouraging news. 
They wrote to say that my Medical Assistance would be cut off 
that same week because my eligibility was taken away "due to 
more income than is allowed." That just makes matters worse for 
me. 

I am writing this letter about the goals and obstacles I 
face in my life in the hope that you might understand how dif- 
ficult my situation is at the moment. Receiving Supplemental 
Security Income (SSI) would help me improve the quality of my 
life by enabling me to have a positive attitude about my future 
and giving me the opportunity to make choices about where to 
live. Without this needed resource, there is no chance for im- 
provement in my life situation and a very good chance that I may 
become a burden to others. Please consider my story so that the 
Congress may be aware of this most unfortunate situation I face 
today. Thank you for your time and consideration. 

Sincerely, 
Recorder 

~yvi <^-~~-*ZT ^ £^l£ e ^ 

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South Carolina Trial Lawyers Association 



P.O. BOX 1 1 557 • COLUMBIA, SOUTH CAROLINA 2921 1 
1-800-849-SCTLA ■ FAX 803-799-1041 



1992-1993 SCTLA OFFICERS 
DOUGLAS F. PATRICK 

President 
Greenville 

RICHARD J. FOSTER 

President Emeritus 
Greenville 

JOHN O. MCDOUGALL 

President- Elect 
Sumter 

SAMUEL L SVAUNA 

Vice- President 
Beautod 

STEVEN M. KRAUSE 

Treasurer 
Anderson 

DONALD R. MOORHEAD 

Secretary 
Greenville 

E PAUL GIBSON 
Editor 

N- Charleston 

TOM TURNIPSEED 

Immediate Past President 
Columbia 



August 2, 1993 



Ms. Janice Mays 

Chief Counsel and Staff Director 

Committee on Hays and Means, 

U.S. House of Representatives 

1102 Longworth House Office Building 

Washington, DC 20515 

Re: Oversight hearing on SSI 

Dear Ms. Mays: 

We are writing on behalf of the South 
Carolina Trial Lawyers Association in response to 
the notice published July 2, 1993, announcing an 
oversight hearing on Supplemental Security Income. 

We will address the issues as they are set 



1992-1993 board of GOVERNORS forth in the announcement: 



DESA A. BALLARD. Barnwell 
J. ALAN BASS. Surfskfe Beach 

• BRUCE A BYRHOLDT. Anderson 
' JOHN E DUNCAN. Lexington 

EUGENE A. FALLON. JR . Florence 
BROOKS P GOLDSMITH. Lancaster 

• CHARLES L. GRIFFIN. III. Sumter 
ALFORD HASELDEN. Clover 

• M TERRY HASELDEN. Spartanburg 
DANIEL E. HENDERSON. Ridgeland 
CHARLES L HENSHAW. JR.. Columbia 
WARING S HOWE. JR.. Charleston 
LARRY R. JACKSON. Darlington 
WILLIAM H. NICHOLSON. III. Greenwood 
HOWARD W -PAT- PASCHAL. JR . Greenville 
CHARNELL G. PEAKE. Columbia! 
F. LEE PRICKETT. JR^St: MawieVvs 
HOWARD S SHEFTMAN, Columbia 
BARNEY O SMITH; JR . Greenville 
MARK C TANENBAUM. Charteslon 
ALAN D TOPOREK. Charleston 



* Executive Committee 
STUDENT CHAPTER 

DEBRA Y CHAPMAN 

President 

Columbia 

ATLA REPRESENTATIVES 
RONALD L MOTLEY. Governor 
KENNETH M SUGGS. Governor 
A. ELLIOTT BARROW. JR.. State Delegate 
J MARVIN MULLIS, JR.. State Delegate 
L. CASEY MANNING. Minority Delegate 

EXECUTIVE DIRECTOR 



1. With regard to recommendations made by 
the SSI modernization panel . . . 

The chances of any applicant, whether 
for SSI or disability benefits, is greatly 
enhanced by attorney representation. 

Unfortunately, unlike the disability 
law, there is no provision in SSI to withhold 
a portion of retroactive benefits to satisfy 
attorney's fees. 

We submit the time for amending SSI 
legislation to provide for withholding 25% of 
retroactive benefits for attorney's fees is 
long overdue. There is no rational 
justification for this disparity between 
Title II and Title XVI. 

SSI applicants are typically the most 
needy of the disabled, and it is unfair to 
deny them attorney representation. 



* 



t<* 



241 



We recognize many SSI claimants are represented by 
Legal Aid attorneys. However, Legal Aid, in most 
states, is not in a position, financially, to develop 
cases, and most cases require additional development. 

Also, amending the attorney fee provisions in SSI, 
as suggested, would draw private attorneys into this 
field and reduce the case load of the already 
overworked Legal Aid organizations. 

For the reasons stated, we urge the 
Committee to consider implementing 
legislation to amend current SSI law with 
regard to attorney's fees. 

Recognizing it could take years to obtain 
legislative amendment, we suggest that, in the interim, 
SSA approve a policy of mailing retroactive SSI checks 
to claimants' attorneys, upon written direction from 
claimants. Such a practice was followed, though not 
widely publicized, by SSA until a few years ago, when 
it was arbitrarily stopped. 

SSA currently takes the position that mailing 
retroactive SSI checks to attorneys designated by 
claimants violates the regulatory prohibition against 
assignments. Such is subject to interpretation. For 
many years, SSA did not view such transactions as 
assignments. 



2. The effect of Zebley . . . 

He are aware there are some who feel children are 
still discriminated against in the post- Zeblev era. 
SCTLA, however, feels that the law is now equitable and 
that restructuring it to favor children would 
discriminate against adults. He feel the present law 
is fair and adequate. 



3. Eligibility requirements for immigrants and substance 
abusers . . . 

a. As to whether immigrants should qualify for 



242 



SSI, we feel immigration, in general, needs to be more 
tightly regulated, and that potential SSI recipients 
should not be permitted to immigrate into the United 
States . 

b. SCTLA feels strongly that anyone convicted of 
defrauding the government, with regard to SSI or any 
other program, should be strictly dealt with by the 
criminal justice system. There are already adequate 
laws to handle this. 

c. With regard to substance abusers, we oppose 
efforts to restrict or deny SSI benefits to these 
unfortunate individuals, political and public opinion 
notwithstanding . 

Substance abuse is now accepted by the medical 
community as a medical /nervous disorder. Substance 
abusers are entitled to disability benefits. Since SSI 
parallels the disability law, it would be 
discriminatory to disqualify substance abusers from 
receiving SSI. 



4. Criteria for establishing trusts . . . 

The wealthy are permitted to establish trusts to 
protect assets and income, so why should the poor be 
denied the same legal right? 

As a practical matter, relatives of SSI 
recipients, if denied the right to establish trusts to 
shield income and assets from the SSI means test, will 
resort to disinheritance. What purpose is then served? 

The present law, with regard to trusts, however, 
is confusing, and we urge SSA to publish definitive 
criteria to guide lawyers who attempt to draw such 
trusts . 



243 



Thank you for the opportunity to contribute input to these 
very important issues which will be before the subcommittee in 
the upcoming hearing. If we can be of further assistance, please 
advise . 

Yours truly, 

Uisx 4- ^^ 

Will T. Dunn, Jr. 
Chairman, SS Section SCTLA 




)ougla^ (F^Patrick 
President, SCTLA 



WTDjr/DFP/nrg 



244 



TESTIMONY OF 

THE HONORABLE PETE STARK 

BEFORE THE 

COMMITTEE ON WAYS AND MEANS 

SUBCOMMITTEE ON HUMAN RESOURCES 

OCTOBER 14, 1993 

Mr. Chairman and Members of the Subcommittee: Thank you for 
holding this hearing. 

I would like to publicly thank the members of the SSI Modernization 
Project for the time and careful attention they gave to reviewing the 
structure and purpose of the Supplemental Security Income (SSI) 
program. Their report is comprehensive and specific. It gives this 
committee and the administration many recommendations which 
deserve our attention and our response. 

I intend to focus on two topics contained in the Project report - 
funding for outreach activities and work incentives. I have 
introduced several bills which address these issues. 

For some time I have thought that one of the quickest and most 
economical ways of signing eligible people up for the SSI Program 
would be to use staff of nonprofit organizations who work with the 
poor. Many of these people already are very knowledgeable about 
the program and have the trust of potential SSI recipients. If they 
aided people in filling out the forms and collected the necessary 
documentation, they would cut down on the time overworked SSA 
staff would have to spend with the potential SSI applicants. In 
return for the time spent by staff, the nonprofit would receive a 
fixed amount of money for each person that turned out to be eligible 
for the SSI program. My bill, HR 2325, creates two demonstration 
projects, one in a poor urban area and one in a poor rural area, to 
test this idea. 

The second topic - work incentives for people on SSI - is addressed 
in HR 3264. This legislation is the result of many hours of reflection 
and discussion by numerous people with real grass roots connections. 
The experts who worked on the Modernization Project and the 
people who worked with a member of my staff to craft the 
legislative language know the anxiety and frustration experienced by 
people with disabilities as they struggle to go back to work . 

The number of people with disabilities who benefit from work 
incentives provisions passed by Congress continues to slowly 
increase. By making improvements in the work incentives, we have 
the opportunity to expand the number of working people and their 
contributions to society. For many people with disabilities, returning 
to work increases their independence and sense of self-worth. 



245 



The provisions of HR 3264 include the following issues: 

• access to work incentives under SSI for Social Security 
Disability Insurance-only recipients who lose eligibility for SSDI 
benefits because of work, 

• eligibility of certain individuals with disabilities for coverage 
under Medicaid home and community-based care waivers, 

• disregard deemed income of ineligible spouse when 
determining continued Medicaid eligibility under section 1619 (b), 

• continuation of Medicaid for the aged who lose SSI due to 
excess earnings, 

• time limits for approval by the SSA of self-support plans, 

• regulations regarding completion of self-support plans, 

• exclusion of income and resources under self-support plans 
in determining Medicaid eligibility in "section 209(b)" States, 

• expansion of self-support plans to include housing goals, 

• self-support plans for the aged, 

• treatment of unemployment compensation, worker's 
compensation, and sick pay as earned income for SSI purposes, 

• treatment of certain grant, scholarship, or fellowship income 
as earned income for SSI purposes, and 

• SSI eligibility for students temporarily abroad. 

A section-by-section analysis of the provisions of HR 3264 is 
included with my testimony and indicates the variety of ways we 
can open doors for people on SSI to become more self-sufficient. 

Again, thank you, Mr. Chairman, for this hearing. I hope the 
subcommittee will be able to take action on these pieces of 
legislation. 



246 

WORK INCENTIVES AMENDMENTS OF 1993 

H.R. 3264 

Section-by-Section Explanation 

TITLE I. ACCESS TO SSI WORK INCENTIVES 



Section 101. Access to Work Incentives Under SSI for SSDI-onlv 
Recipients Who Lose Eligibility for SSDI Benefits Because of 
Work 

Under current law, an individual must have been eligible for at least one 
month of regular SSI benefits prior to being eligible under the Section 
1619 work incentive provisions, including continued Medicaid. 

This provision makes it possible for an individual who is eligible for 
disability benefits under the Title II Social Security Disability Insurance 
(SSDI) program and loses eligibility because of earnings to become 
immediately eligible for the SSI Section 1619 work incentives without 
having been eligible for at least one month of regular SSI benefits. 

The work incentives for people on SSDI are time-limited and do not allow 
for people with limited work ability to go in and out of the job market. 
People on SSDI can go back to work and still receive benefits throughout a 
nine-month (not necessarily consecutive) trial work period, plus an 
additional three-month grace period. If earnings exceed $200 for a month, 
the month usually counts as a month of trial work. After the trial work 
period plus the three-month grace period, SSDI benefits are suspended, if 
earnings continue to be at the Substantial Gainful Activity (SGA) level. 
During a 36-month Extended Period of Eligibility (EPE), SSDI benefits can 
be reinstated for any month that earnings do not exceed the SGA level. 
Also, Medicare coverage can continue for the same length of time. 

When persons lose SSDI benefits, they may have more resources than are 
allowed under the SSI eligibility rules. Because it would be helpful for 
people to have access to the SSI Section 1619 work incentives, this 
amendment provides a time period for people to spend down certain 
excess resources while they begin to work under the Section 1619 work 
incentives provisions. Individuals would have 12 months to spend down, 
beginning 3 months after the end of an individual's trial work period, 
which is to say after the three-month grace period following the trial work 
period. For example, if a person has $2500 in resources when they begin 
to work under the Section 1619 work incentive provisions, they would 
have 12 months to spend the $500 which is the amount over the SSI 
resource limit. 

The individual would have to apply for SSI under this provision no later 
than 3 months after receiving notification from the SSA that they were no 
longer eligible for SSDI benefits. 

It may happen that after an individual moves from receiving SSDI benefits 
to receiving SSI benefits, the person's earnings drop below the SSDI SGA 
level. This could trigger the resumption of SSDI benefits. The amendment 



247 



provides that, if this happens during the SSDI program's 36 month EPE, 
such earnings will not eliminate eligibility for Medicaid under Section 
1619(b). 

This provision is based on a recommendation made by members of the SSI 
Modernization Project. 



Title II. Work Incentives Waiver Authority 



Section 201. Eligibility of Certain Individuals with Disabilities 
for Coverage Under Medicaid Home and Community-Based Care 
Waivers 

Under the Section 1915(c) waiver authority in Medicaid law, States with 
approved applications may provide home and community-based care to 
persons who, without these services, would require institutional care that 
would be covered by Medicaid. The purpose is to prevent or postpone 
institutionalization of persons who could be served in the community. To 
that end, 1915(c) waivers permit States to cover services that go beyond 
the medical and medically-related benefits that have been the principal 
focus of Medicaid law. With approved waiver programs, States are 
authorized to cover a wide variety of nonmedical, social and supportive 
services that have been shown to be critical in allowing persons to remain 
in the community. These include personal care services, case management, 
homemaker/home health aide services, adult day health services, 
habilitation services, respite services and other services requested by the 
State and approved by the Secretary of HHS. For the chronically mentally 
ill, the waiver program also authorizes day treatment or other partial 
hospitalization, psychosocial rehabilitation services, and clinic services 
(whether or not furnished by a facility). 

However, some individuals with deteriorating physical disability 
conditions, such as Muscular Dystrophy, who are currently working but 
need Personal Assistance Services to enable them to continue to work, are 
denied eligibility for Medicaid on the basis of disability because they have 
earnings in excess of the SGA earnings test for disability. 

The intent of this section is to allow a state to initiate a request for an 
addition to the waiver or waivers that they have under the home and 
community-based care waivers in Title XDC. This could be an add-on to 
current or future home and community-based waiver projects in a state. 

States would be allowed to have a waiver of the definition of disability 
under Medicaid related to the SGA earnings test for purposes of the home 
and community-based care waiver programs. Specifically, a state would 
be allowed to serve individuals who have earnings which exceed the SGA 
earnings test for initial eligibility on the basis of disability. Such 
individuals would have to qualify under the medical criteria for disability 
for Medicaid. They would also have to meet the requirements under the 
Medicaid home and community-based care waiver program that their 
impairments be so severe that they require the level of care provided in a 
skilled nursing facility or an intermediate care facility. 

Eligibility for the waiver program is limited to individuals with incomes 
less than 300% of the federal SSI benefit standard. The earned income 



248 



disregards do not apply in determining an individuals continued eligibility 
under the 300% limit. This amendment would allow a state under such a 
waiver to apply the SSI earned income disregard. 



Section 202. Waiver Authority 

Under current SSI law, the first $20 of any income in a month is 
disregarded in determining SSI benefits. In addition, $65 of earnings and 
one-half the remaining earnings is disregarded in determining benefits. 
Under this amendment, at the request of a state, the Secretary of HHS may 
provide for SSI applicants and recipients in that state - instead of $65 and 
one-half of remaining earnings being disregarded - $200 plus one-third of 
the remaining earnings be disregarded. 

This section is in response to the portion of the SSI Modernization Project 
report which calls for SSI work incentives demonstration projects. The 
Panel called for both work incentives demonstrations and, at the same 
time, they recommended eventual permanent changes in the SSI earned 
income disregards to $200 plus one-third of the remaining earnings. 

The amendment provides that such SSI work incentives demonstrations be 
at the request of the state because of the potential impact of changes in SSI 
eligibility on State Medicaid programs. 



Title III. Amendments to Work Incentive Provisions 



Section 301. Disregard Deemed Income of Ineligible Spouse 
When Determining Continued Medicaid Eligibility Under Section 
1619(b) 

Under current law and regulations, if an SSI recipient who is working and 
benefiting from the Section 1619 work incentives marries, the income 
deemed from an ineligible spouse may increase their income to the point 
that they do not meet the requirement in Section 1619(b) that they would 
be eligible for cash benefits but for earnings. This amendment would 
disregard the income of the ineligible spouse in determining eligibility 
under Section 1619(b) for Medicaid. 

This amendment is based on a recommendation made by members of the 
SSI Modernization Project. 

Section 302. Work Incentives for Persons Eligible on the Basis o 
Age 

Under present law, the continuation of Medicaid (without a spend down) 
under Section 1619(b) when income exceeds the income disregard break 
even point only applies to persons eligible on the basis of disability. This 
amendment would provide that such policy would apply under a new 
Section 1619(e) for persons eligible on the basis of age. 

This amendment is based on a recommendation made by members of the 
SSI Modernization Project. 



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Section 303. Self Support Plans Not Disapproved Within 30 days 
to be Deemed Approved 

This provision would provide that unless the Social Security 
Administration acts within 30 days of an individual submitting a Plan for 
Achieving Self Support (PASS) to the Social Security Administration the 
PASS plan would be deemed to be in effect. It does make it clear that 
after the deemed approval that the Secretary can subsequently disapprove 
the PASS prospectively. The individual will have six months to spend 
down accumulated funds. 

This amendment is based on a recommendation made by members of the 
SSI Modernization Project. 

Section 304. Regulations Regarding Completion of Plan for 
Achieving Self Support 

Under current regulations, a PASS can be for up to four years in length. 
This amendment would require the Secretary to have regulations which 
would vary according to "the difficulty of achieving self support based on 
the nature and severity of the disability." 

This amendment is based on a recommendation made by members of the 
SSI Modernization Project. 

Section 305. Exclusion of Income and Resources Under Plans foi 
Achieving Self Support in Determining Medicaid Eligibility in 
Section 209(b) States 

Under present law, there is no explicit language in the SSI law that a State 
which has elected the 209(b) option, that is, does not utilize the SSI criteria 
to provide automatic eligibility for Medicaid for SSI recipients, be required 
to disregard under that State's Medicaid eligibility criteria the same 
income and resources disregarded under a SSI PASS plan. This can have 
the effect of negating the incentive to work under the SSI work incentives. 
This amendment would require 209(b) states to disregard income and 
resources disregarded for SSI eligibility to be disregarded under a state's 
Medicaid eligibility criteria. 

This amendment is based on a recommendation made by members of the 
SSI Modernization Project. 

Section 306. Expansion of Self Support Plans to Include Housing 
Goals 

Under present law, income of a SSI recipient which is identified and 
earmarked for eventual use under a PASS is not considered to be 
countable income or resources in determining eligibility for or amount of 
SSI. That is, earned income and other income received by persons with 
disabilities can be placed in a special bank account and that income is not 
considered in determining initial eligibility for SSI or the amount of income 
counted in determining their monthly benefit under SSI. Also, what they 
save can exceed the SSI resources limit if there is a Plan to be funded by 
the special PASS savings account. 



BOSTON PUBLIC LIBRARY 

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3 9999 05983 288 9 

The disregard under a PASS is to finance such items as educational 
costs related to a person's career goals or adapting a van to one's physical 
limitations in order to drive to work. 

However, for persons with severe disabilities their ability to achieve other 
goals are often precluded because of the resource limitations in current SSI 
law. While individuals are allowed to own their own homes and not be 
denied eligibility for SSI, the $2,000 limit on liquid resources in SSI law 
prevents an SSI recipient from accumulating resources to be used to 
achieve more independent housing. Also, individuals are precluded from 
accumulating resources to have the cash for the initial costs of moving into 
their own apartment or home or for special remodeling or refurbishing of 
their housing to accommodate it to their special needs or even 
accumulating funds for a down payment toward owning their own home. 

This amendment to SSI PASS provisions would provide that a Plan for 
Achieving Self Support could be for the purpose of achieving a "career goal 
or a housing goal". That is, it would add to the current income disregards 
and disregards for countable resources under the SSI program the 
disregard of the income received in a month and resources saved which 
are for the purpose of enabling an individual to achieve a housing goal. 

As in the case of a PASS under current law, a PASS which deals with 
achieving greater independence in housing must be developed by the 
individual. The plan also would have to be approved by the SSA and the 
goals have to relate to enabling the individual to live as independently as 
possible. 

The funds saved would have to be identifiable and apart from other bank 
accounts as in the case of a current PASS. The length of time for a plan for 
greater independence in housing would be flexible according to the goals 
and needs of the individual. The maximum amount an individual would be 
allowed to accumulate under a PASS concentrating on a housing goal would 
depend on the goal and what is realistic and necessary based on housing 
and security costs in a community and the special housing needs of the 
individual. 



Section 307. Self Support Plans for the Aged 

The amendment would provide that Impairment Related Work Expenses 
(IRWE) and the PASS provisions (including the addition to PASS for a 
housing goal) would also apply to persons who are eligible on the basis of 
age as well as persons with disabilities. 

This amendment is based on the recommendation made by members of 
the SSI Modernization Project that the work incentives be extended to the 
aged. 



Section 308. Additional State Supplementation Requirement 

States have the explicit option not to have their SSI state supplement 
apply for persons who are eligible only on the basis of Section 1619. This 
amendment would provide that if a state has an agreement with the SSA 
for federal administration of state supplements, they must provide for 



251 



state supplements to apply to Section 1619 eligible individuals. There is 

no other mechanism for enforcement of such a requirement other than the 

federal/state agreements for federal administration of state 

supplementation. 

This amendment is based on a recommendation made by members of the 

SSI Modernization Project. 

Section 309. Treatment of Unemployment Compensation, 
Worker's Compensation, and Sick Pay as Earned Income for SSI 
Purposes 

Under present law, an SSI recipient could lose eligibility for SSI and 
Medicaid if they have worked and become eligible for Unemployment 
Compensation and other work-related benefits such as worker's 
compensation and sick pay because such income is treated as unearned 
income with only a $20 disregard. This amendment would provide for the 
treatment of these work-related benefits as earned income with the $65 
plus one-half the remaining earnings disregarded. 

This amendment is based on a recommendation made by members of the 
SSI Modernization Project. 



Section 310. Treatment of Certain Grant, Scholarship or Fellov 
Income as Earned Income 

Under present law, SSI excludes from being counted as income any portion 
of any grant, scholarship or fellowship received for use in paying the cost 
of tuition and fees at any educational institution. However, such funds 
received by a person with a disability not used for those purposes are 
treated as unearned income and only the first $20 a month is disregarded. 
The amendment would treat such funds not used to pay for tuition and 
fees as earned income with the earned income disregard of $65 plus one- 
half the remaining earnings disregarded. The main impact would be to 
keep such students eligible for Medicaid under the provisions of Section 
1619(b). 

Section 311. SSI Eligibility for Students Temporarily Abroad 

Under present law, if an SSI recipient is out of the United States for an 
entire calendar month they lose their eligibility for SSI benefits. When 
they return, they must be in the United States for no less than 30 days to 
again become eligible for SSI benefits. This causes severe problems for a 
small number of individuals with disabilities who are pursuing their 
education which includes study in other countries. This amendment would 
allow the SSA to waive that requirement when it would cause severe 
disruption for persons with disabilities who are pursuing an education to 
further their career. 



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